Oil Price Exceeds $109 Amid Lower Output From Libya
Libya’s failure to reach an agreement with aggrieved militants over the reopening of several oil ports has lowered exports and triggered a crude price surge that has exceeded $109 a barrel.
Libya’s Oil Minister Abdelbari al-Arusi, last week, confirmed that the current standoff between militants and the government over the seizures of oil ports reduced production by 82 percent since July, costing the country over $7 billion.
“This means that approximately 600,000 bpd of potential exports will remain off the market,” JBC Energy Managing Director David Wech said.
The drop from July’s 1.4 million bpd to a current 250,000 has further shortened exports and tightened global supply which has led to a hike in price.
A report by Reuters showed Brent Crude price jumped to a high of $109.94 per barrel by stabilizing at $109.83 by Monday morning.
Analysts believe a failure to successfully negotiate a deal will drag under-production into 2014, shrink international supply and raise the cost of energy consumption.