• News
  • Finance

Brent oil drops as rebels agree on open ports

Brent crude fell for the first time in three days after Libyan rebels surrendered control of two oil ports to the government, enabling the OPEC country to increase exports. West Texas Intermediate declined.

Brent dropped as much as 1.4 percent. The self-declared Executive Office for Barqa handed over the oil terminals of Hariga and Zueitina overnight and will relinquish the other two ports they control in two to four weeks, said Ali Al-Hasy, a spokesman for the group.

Libya’s output fell to 250,000 barrels a day in March from 1.4 million a month earlier, according to data compiled by Bloomberg.

“The possibility that Libyan barrels are returning to the market is weighing on oil,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Conn. “Rising supplies will drive the market lower.”

Brent for May settlement dropped 83 cents, or 0.8 percent, to $105.89 a barrel at 9:20 a.m. New York time on the London- based ICE Futures Europe exchange. The volume of all futures traded was 45 percent higher than the 100-day average.

WTI for May delivery decreased 67 cents, or 0.7 percent, to $100.47 a barrel on the New York Mercantile Exchange. Volume was 2 percent below the 100-day average. The U.S. benchmark grade’s discount to Brent shrank to $5.42 from $5.58 on April 4.

Hariga has a capacity of 110,000 barrels a day, and Zueitina can handle 70,000, according to IHS Inc., a consultant based in Englewood, Colo.

The other two terminals are Es Sider, the nation’s largest port at 340,000 barrels a day, and the Ras Lanuf terminal with 220,000.

Libyan exports

Libya currently exports about 85,000 barrels a day of crude from the offshore fields of Jurf and Bouri, which are unaffected by the protests that have disrupted output on land, according to the Oil Ministry.

“The protesters are banned from returning or obstructing work at the ports,” Justice Minister Salah Al-Mirghani said after talks with rebels Sunday in Zueitina.

Libya, the holder of Africa’s biggest crude reserves, has become the smallest producer in the 12-member Organization of Petroleum Exporting Countries as rebels seeking self-rule in the eastern region of Cyrenaica halted production and shipments.

User Response
0 UserComments