Oil prices hit $52 as expected Libyan oil boost hampered

Samir Tounsi/AFP/Getty Images

Oil extended gains above US$52 (RM232) a barrel as a planned production boost from Libya stalled amid continuing tension in the Opec member that’s exempt from output cuts.

Futures climbed as much as 1.2 per cent in New York after rising 2 per cent on Friday. Libyan oil-facility guards backtracked on an agreement to allow supply to flow from the El Feel and Sharara fields, two of the country’s biggest, according to an engineer that operates El Feel.

The “oil price is heading higher — period — as a result of Opec/non-Opec’s decision to cut,” Bjarne Schieldrop, chief commodities analyst at SEB Markets, said by e-mail. “The effect from these decisions are not yet behind us,” while Libya’s production problems are also supporting the price, he said.

Libya’s National Oil Corporation has for now stopped the relaunch of production at oil fields in the country’s west, Libyan officials said Sunday, after a militia threatened to block the petroleum from reaching the market.

The aborted restart is a blow for Libya’s oil industry, which has been counting on the country’s big western fields to kick-start its comeback.

A pipeline, in Rayaina district near Zintan city, that can transport over 400,000 barrels a day from two western fields had partly reopened on Wednesday, but efforts to send that oil to coastal ports are now off, oil officials said.

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