Crude oil prices recovered losses in early Asian trade on news that military conflicts in Libya had affected its oil exports over the weekend.
The Petroleum Facilities Guards, a militia that until this month had controlled Libya’s oil ports for years after the 2011 ouster and death of dictator Moammar Gadhafi, briefly retook two oil ports, Sidra and Ras Lanuf, in the country’s central coast on Saturday night, militia members said.
The guards were forced out again on Sunday by the Libyan National Army, a militia that had pledged to reopen the ports for exports.
“The oil market is reacting to that news, but keep in mind this could be just a temporary setback and a blip in the market,” said Vyanne Lai, energy analyst at National Australia Bank.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October CLV6, 1.74% traded at $43.84 a barrel, up $0.80, or 1.9%, in the Globex electronic session. November Brent crude LCOX6, 1.57% on London’s ICE Futures exchange rose $0.76, or 1.7%, to $46.53 a barrel.
Some analysts say bargain hunting following a decline overnight was also pushing oil prices higher. However, persistent oversupply and ultra-high inventories of refined products in the U.S., along with near record-high output by members of the Organization of the Petroleum Exporting Countries and the prospect of a strong return of U.S. shale oil, are keeping global oil prices in the doldrums, a Singapore-based fuel oil trader said.
OPEC is scheduled to have an informal meeting on Sept. 28 in Algeria, but cartel chief Mohammed Barkindo said late Saturday that no decision on production will be made then. Barkindo said OPEC would try to reach a consensus and then could call an emergency meeting to make an actual decision, but only on the condition that all members reach an agreement.
“It is clear that at the moment, there is no consensus among the OPEC members and what is the chance they will reach one in a week?” said Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia who surmised Barkindo’s comment was to “manage the market’s expectation” for a non-result from next Wednesday’s meeting.
For this week, market players will be zeroing on the Bank of Japan and the U.S. Federal Reserve. Both central banks are expected to make monetary-policy announcements that could ripple through global financial markets on Wednesday. On the same day, China will release its final August oil trade data, which will likely confirm crude imports last month were at their second-highest level ever at 32.85 million barrels a month.
Nymex reformulated gasoline blendstock for October RBZ6, 1.29% — the benchmark gasoline contract — rose 47 points to $1.4663 a gallon, while October diesel traded at $1.4238, 187 points higher.
ICE gasoil for October changed hands at $414.75 a metric ton, up $2.25 from Friday’s settlement.
Source: MarketWatch
