Libya’s oil industry is reopening, however, in parts, commodity news reported. All of the country’s oil industry was shut down in January due to the civil war.
Oil output has almost tripled to 250,000 barrels a day. This was since the partial lifting last week of a blockade on the OPEC member’s energy facilities.
Exports were allowed to resume at the ports of Hariga, Brega and Zueitina by the state National Oil Corp. But it is evaluating security at export terminals that are still shut including Es Sider and Ras Lanuf and Zawiya.
Production of energy commodities in Libya plummeted to less than 100,000 barrels a day in January. This drop was from 1.2 million after Khalifa Haftar, a Russian-backed commander blockaded energy infrastructure.
Goldman Sachs Group Inc forecasts that output will rebound to 550,000 barrels a day by the end of 2020. Analysts at Bloomberg Intelligence expect production to hit 1 million barrels a day in Q4.
This is further pressuring oil prices already hammered by the COVID-19 pandemic. This production is possible if a truce holds between Haftar and the United Nations-recognized government of Prime Minister Fayez al-Sarraj.
Libya has a way of confounding optimists. Previous agreements to reopen its oil industry have failed. With that, any additional supplies would enter the crude market at an awkward time.
Oil : The OPEC+ Limits
A recovery from the historic slump triggered by the COVID-19 pandemic is faltering. The Organization of Petroleum Exporting Countries and allies such as Russia are easing their self-imposed limits on output.
Due to its strife, Libya is exempt from these OPEC+ limits. However, the amount of any extra oil the country can export will depend on how quickly it can fix wellheads. It will also depend on how speedy it can fix pipelines and storage tanks that have been neglected or damaged.
Meanwhile in precious metals, Gold’s risks appear skewed to the downside on Monday, while a softer dollar provides little respite. Both oil and gold have come under early pressure.
Gold came under pressure in recent weeks and it has stabilized a little. However, there doesn’t look to be much appetite in the near-term.
US real yields have been inching higher which may be contributing to the downward pressure on the yellow metal’s prices. It may be one to watch if that gathers any real momentum.