By Adedapo Adesanya
Oil went up on Monday as Libyan oil exports remained halted and concerns about higher production from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) expected to kick off in October.
Brent crude futures were up by 37 cents or 0.5 per cent to settle at $77.30 a barrel and the US West Texas Intermediate (WTI) crude rose by 49 cents or 0.7 per cent to trade at $74.04.
Monday marked a public holiday in the US market, hence there was muted trade.
Libya is yet to resume oil exports one week after the Haftar clan blocked production in a bid to gain leverage over a battle to control the country’s central bank.
Exports remained halted at the ports of Es Sidra, Ras Lanouf, Hariga, Zueitina, Brega and Sirte although some production was being increased to feed local power generation and ease fuel shortages.
According to S&P Global, up to 230,000 barrels per day of crude output has been restored at three eastern fields under the control of warlord Khalifa Haftar, a far cry from Libyan output at 1.15 million barrels per day in July
The country’s National Oil Corp. (NOC) also declared force majeure on the El Feel oil field on Monday (September 2).
Instability in Libya’s oil output has been a recurring feature since 2011 with commodity analysts at Standard Chartered estimating that it has led to a loss of just over 4 billion barrels of output and cost the North African country $320 billion in lost revenue.
Market analysts note that the current disturbances in Libya’s oil production could provide room for added supply from OPEC+.
The 22-member alliance is set to proceed with planned increases in oil output from October. Eight members are scheduled to boost output by 180,000 barrels per day in October as part of a plan to begin unwinding their most recent supply cuts of 2.2 million barrels per day while keeping other cuts in place until the end of 2025.
Brent and WTI have posted losses for the last two consecutive months as US and Chinese demand concerns have outweighed recent disruptions in Libya and supply risk related to conflict in the Middle East. The bearish outlook for 2025, has also pressured prices.