Brent crude oil futures as well as light, sweet crude for November and December delivery were up slightly Oct. 22 as the market turned its eyes to Saudi Arabia. BENGHAZI and CAIRO (Bloomberg) — Libya, one of the most volatile and politically fragmented oil producers, expects to pump as much crude by the end of next year as it did before the 2011 revolt against former strongman Moammar Al Qaddafi. The kingdom plans to increase its crude oil output and does not intend to use its reserves as a political tool in the controversy over the killing of journalist Jamal Khashoggi, Bloomberg reported Oct. 22, citing Russia’s TASS news agency’s interview with Energy Minister Khalid Al-Falih. “For decades we used our oil policy as a responsible economic tool and isolated it from politics,” Al-Falih said in the interview. “So let’s hope that the world would deal with the political crisis, including the one with a Saudi citizen in Turkey, with wisdom,” he said.
Saudi Arabia has said it could raise output to 11 million b/d but concerns of oil price hikes linger as the kingdom vowed to strike back against any punitive measures linked to Khashoggi’s killing. Chairman Mustafa Sanalla said in an interview. The North African nation currently pumps 1.25 MMbpd, he said in the eastern city of Benghazi. In addition of new pipelines,” Sanalla said. “We aim to reach 1.6 MMbpd by the end of next year, and this level can increase.” The light, sweet crude contract for November delivery on the New York Mercantile Exchange gained 5¢ to $69.17/bbl on Oct. 22. The December contract was up 8¢ to settle at $69.36/bbl.
“We’ve put together a plan to boost field production, including pipeline maintenance and If it reaches this target, Libya would be producing at the level it last maintained in the years before Qaddafi’s ouster and death and the nation’s ensuing civil war. Political divisions and internal fighting have plagued Libya since then. While NOC officials have sought to increase oil and natural gas output, security issues and lawlessness continue to threaten the country’s energy revival. The NYMEX natural gas price for November was down 11¢ to $3.14/MMbtu. Ultralow-sulfur diesel for November gained 1¢ to a rounded $3.32/gal. The NYMEX reformulated gasoline blendstock for November was down less than 1¢ to remain unchanged at a rounded $1.91/gal. Brent crude oil for December was up 5¢ to $79.83/bbl on London’s International Commodity Exchange. The January contract gained 18¢ to $79.44/bbl. The gas oil contract for November rose $1.15 on Oct. 22 to close at $716.25/tonne. Oil prices have climbed 15% this year, partly because of disruptions in Libya. Brent crude, the global benchmark, rose 0.6% to $76.63/bbl at 5:55 p.m. in Dubai.
Sanalla spoke Wednesday on the sidelines of an oil conference in the country’s second-largest city. US crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 6.3 million bbl for the week ended Oct. 19, according to data from the US Energy Information Administration. At 422.8 million bbl, US crude oil inventories are about 2% above the 5-year average for this time of year, the report indicated. Separately, the American Petroleum Institute said its own estimates showed US crude inventories increased week-over-week to 418.4 million bbl. EIA said total motor gasoline inventories decreased by 4.8 million bbl and are about 6% above the 5-year range. Finished gasoline inventories and blending components inventories both decreased last week. Distillate fuel inventories decreased by 2.3 million bbl last week and are about 4% below the 5-year average for this time of year.
Propane-propylene inventories decreased by 300,000 bbl last week and are about 4% below the 5-year average for this time of year, EIA said. US refinery inputs averaged 16.3 million b/d for the week ended Oct. 19, about 48,000 b/d less than the previous week’s average. Refineries operated at 89.2% of capacity. Gasoline production decreased, averaging 10 million b/d. Distillate fuel production increased, averaging 5 million b/d. US crude oil imports averaged 7.7 million b/d, up by 63,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.7 million b/d, 0.7% more than the same period last year. Total motor gasoline imports averaged 331,000 b/d. Distillate fuel imports averaged 163,000 b/d. The feud led in June to a halt of oil shipments from key ports in eastern Libya, where a weak economy has stoked anger among residents who think too much wealth is concentrated in the west of the country.
The NOC held a board meeting in Benghazi on Thursday for the first time in “several years,” it said on its website. The selection “confirms the return of security and stability at this ancient city.”