Oil prices are set to continue their climb toward the $100 mark this week thanks to supply disruptions in Libya and expectations of a further U.S. inventory draw, OilPrice reports.
As the oil markets anticipate US inflation data for August and the ECB’s interest rate decision later this week, supply disruptions in Libya have added a little upside to prices again, with ICE Brent moving past the $91 per barrel mark. Expectations are that this week will bring about another US crude inventory drop, and absent any negative macro news, the climb toward $100 per barrel is set to continue.
Hurricane disrupts Libyan Loadings.Battered by Hurricane Daniel for several days already, Libya has shut four oil ports – Ras Lanuf, Es Sider, Brega, and Zueitina – as state authorities kept oil infrastructure at maximum alert and mandated that workers restrict any movements between sites.
Oil cuts might drag Saudi Arabia into recession.As Saudi Arabia extended its 1 million b/d production cuts until December, the country is set for a 9% year-on-year drop in output, the largest decline in 15 years, with analysts expecting Riyadh to witness a slight 0.2% GDP reduction this year.
Freeport LNG in trouble again. Feedgas flows to the Freeport LNG facility, the second-largest liquefaction plant in the US, declined sharply from 1.640 mcf/day on September 8 to 284 mcf/day currently, reportedly due to a customer’s failure to take confirmed quantities to the terminal.
Chevron’sGorgon and Wheatstone liquefied natural gas facilities started short strikes last Friday after the last round of negotiations between the company and workers’ unions broke down without a deal.
Loadings are still ongoing at the two LNG terminals, with 3 laden tankers departing since the short strikes began, however from Thursday onwards unions are preparing for full-blown industrial action that would halt exports altogether.
The US major no longer expects a negotiated deal and filed three applications for an intractable bargaining declaration, with the dispute between Chevron and respective workers heard by Australia’s industrial relations tribunal on September 22.
Accounting for 5% of global LNG supply, the prospect of Gorgon and Wheatstone facilities would mostly impact Japan’s gas imports as the East Asian country takes in almost half of their total volumes.
/OilPrice/