Oil Ticks Higher as Libya Tensions Flare
29 March 2017 - 12:39PM
Dow Jones News
By Neanda Salvaterra and Jenny W. Hsu
Oil prices crept up on Wednesday amid supply disruptions in
Africa and renewed commitments by major oil producers to rein in
production.
Brent crude, the global oil benchmark, rose 0.68% to $51.69 a
barrel on London's ICE Futures exchange. On the New York Mercantile
Exchange, West Texas Intermediate futures were trading up 0.60% at
$48.65 a barrel.
Crude prices received support after Libya reported the closure
of key pipelines as tension between the government and a militia
flared up again removing about 250,000 oil barrels a day from the
market.
"We are seeing tighter supply and this is very likely to
continue well into April," said Georgi Slavov, the global head of
energy research at Marex Spectron. "But demand remains weak which
is why oil is not flying at the moment."
Investors also welcomed comments from members of the
Organization of the Petroleum Exporting Countries, who are showing
a willingness to cut more of their supplies to make a dent in
global inventories.
United Arab Emirates announced plans to reduce its production by
about 200,000 barrels from March to May, "which is actually more
than was agreed," said Commerzbank analysts in a recent note.
A surge in U.S. production, however, is still overshadowing the
market.
The American Petroleum Institute said Tuesday that supplies rose
1.9 million barrels in the week ended March 24.
A survey by The Wall Street Journal has analysts anticipating
the U.S. Energy Information Administration will on Wednesday report
a 1-million-barrel increase in its count but declines in
refined-product inventories. Such drops would help support crude
prices.
Meanwhile, market players are eyeing the reshaping of U.S.
energy policy under President Donald Trump, who on Tuesday signed
an executive order to roll back environmental protection measures
implemented by his predecessor.
The move underscores Mr. Trump's resolve to revitalize
traditional energy sectors such as oil and coal as part of his
campaign promises.
However experts say the main culprit for coal's decline is
natural gas, which has flooded the market since the shale oil
revolution, and a method called hydraulic fracturing has
facilitated the extraction of oil and undercut coal prices.
Nymex reformulated gasoline blendstock--the benchmark gasoline
contract--rose 0.43% to $1.64 a gallon. ICE gasoil changed hands at
$460.75 a metric ton, up $1 from the previous settlement.
Write to Neanda Salvaterra at neanda.salvaterra@wsj.com and
Jenny W. Hsu at jenny.hsu@wsj.com
(END) Dow Jones Newswires
March 29, 2017 07:24 ET (11:24 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.