Oil prices soar to a two-year record high over Libya pipeline attack

A general view of the Sirte Oil Company in Brega. REUTERS/Esam Omran al-Fetori

Crude slipped from the highest level in two and a half years amid light trading volume and reports that repairs to a Libyan pipeline should wrap up next week.

Futures fell as much as 1.1 percent in New York amid holiday trading volume about 44 percent below the 100-day average. The Waha Oil Co. pipeline that carries crude to Libya’s Es Sider terminal will need about a week for repairs, according to people familiar with the situation. The line exploded Tuesday and the nation’s output is said to have dropped below 1 million barrels a day, Bloomberg reported Tuesday.

A group of gunmen blasted a pipeline pumping crude oil to Al-Sidra port on Tuesday, cutting Libya’s oil production by up to 100,000 barrels per day (bpd), military and oil sources reported on Monday.

The Libyan National Oil Corporation (NOC) commented on the incident in a statement, saying the output had been reduced by 70,000-100,000 bpd.

The cause of the explosion was unclear, the NOC added.

The gunmen, according to military sources, arrived at the site near Marada in two cars and planted explosives on the pipeline.

“You have a few people wrapping up their books” at the end of the year, Ashley Petersen, lead oil analyst at Stratas Advisors in New York, said in a telephone interview. At the same time, the market is “probably reassured now. I don’t think it’s going to take a very long time to fix” the line that exploded in Libya, Bloomberg wrote.

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