Libyan Oil Fields Shut Down, Oil Prices Soar Again


Libyan Oil Fields Shut Down


Oil prices soared at the opening of trading on Friday (July 14, 2023) due to tighter supplies and subdued inflation in the United States (US).

WTI crude oil opened with a 0.35% surge at $77.16 per barrel, while Brent crude oil opened up 0.34% at $81.64 per barrel.

In Thursday's trading (July 13, 2023), WTI crude oil closed with a 1.50% surge at $76.89 per barrel, and Brent crude oil also rose by 1.56% to $81.36 per barrel.

Oil prices rose at the opening of trading on Friday, supported by tighter supplies amidst issues in Libya and Nigeria, as well as the declining inflation in the US, which is expected to allow the market to end the interest rate hikes in the world's largest economy.

US consumer prices moderately rose in June at the smallest annual increase in over two years as inflation continued to ease. Producer prices also barely increased in June, and the annual increase was the smallest in almost three years.

Both indicators provide hope to the market that the US Federal Reserve may be closer to ending its fastest monetary tightening since the 1980s.

On Thursday, several oil fields in Libya were shut down as a protest by local tribes against the kidnapping of a former minister. Separately, Shell has suspended the loading of Forcados crude oil in Nigeria due to potential leaks at the terminal.

The protests in Libya could take over 250,000 barrels of oil per day out of the market. This comes amid signs of recent supply cuts by Saudi Arabia and Russia.

Saudi Arabia and Russia, the world's largest oil exporters, agreed this month to extend the oil cuts that have been in place since November last year, providing further support to crude oil prices.

Oil demand is expected to reach a record high this year. Paris-based energy watchdogs foresee an increase in demand for next year, although the growth is projected to be less than half of this year's growth.

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