Tag: Libya

Sheila McNulty

Sara Akbar, chief executive of Kuwait Energy, an independent oil and gas company focused on the region, brought to the IHS Cambridge Energy Research Associates’ annual energy conference in Houston what she called a “view from the street” on the North Africa/Middle East tensions.
Akbar said that although the region was made up of disparate countries, they had enough similarities that one spark had set off change throughout. Even in Kuwait – which she noted had a very stable political system – there were calls for change.

Could Saudi Arabia be telling porkies when it comes to its spare capacity capabilities?

It’s something Goldman Sachs analysts are wondering on Tuesday.

For example, they’ve deduced — from reverse-engineering the kingdom’s production levels — that Saudi may have raised output before the crisis in Libya ever broke out.

As Brent crude climbs to $118 a barrel on the back of events in Libya, Javier Blas, commodities editor, talks to Daniel Garrahan about how high prices could go if the unrest in the Middle East spreads to Saudi Arabia.

It’s not just about finding enough quality crude to replace Libya — it’s about the not insubstantial political risks hanging over those supplies, too.

Fighting in Libya worsened on Wednesday, as rebels counter-attacked an offensive by Gaddafi forces into the country’s east — which is where much of the oil production is (was), incidentally.

Another reminder that the search for decent substitutes for Libya’s good-quality crude is turning into a longer-term problem, not just a short-term fix.

Kiran Stacey

Reuters and Upstream are reporting what looks like good news for those relying on Libyan oil supplies. According to both sources, Jammal bin Nour a judge and member of the coalition that says it is in charge in Benghazi, has said:

The oil deals (with foreign companies) that are legal and to the benefit of the Libyan people we will keep.

Kiran Stacey

Just yesterday I was listening to the chief economist at the Centre for Global Energy Studies explain calmly why the oil price was unlikely to hit $150 a barrel. Today, it has taken a huge jump in that direction, peaking at more than $119.

Analysts are scrambling to update their forecasts. Here are some of their more important/interesting thoughts:

Hitting the wires at pixel time — an astonishing promise:

RIYADH, Feb 24 (Reuters) – Saudi Arabia is willing and able to supply high quality, light oil to replace any lost Libyan crude, senior Saudi sources said on Thursday.

“Saudi is willing and capable of supplying oil of the same quality, either Arab extra light or through blending,” one source said…

Some West African crude, such as Angolan crude can also be redirected to Europe, the sources said, while Saudi Arabia could temporarily send extra oil to Asia to compensate.

At least half of Libya’s oil production has been shut down in the wake of the violence wracking the country, industry executives estimate.

The continuing disruption in the country, the world’s 12th largest exporter of crude, drove oil prices to a fresh 2½-year peak on Wednesday. Brent oil futures jumped 3.7 per cent to hit $110 a barrel for the first time since before the collapse of Lehman Brothers. The benchmark has risen 7.7 per cent since Monday.

Apart from the prospect of $220 a barrel…

Much discussion on Wednesday of whether Opec could pump more oil from the Arabian peninsula to make up for Libya going offline — so we thought these pointers from Barclays Capital’s Amrita Sen might help:

Kiran Stacey

As the oil price continues to surge, hitting $109 a barrel, the oil price movement for 2011 has begun to look very much like that in 2008, when the price ended up hitting $145, and became a contributing factor to the slump.

But Leo Drollas, chief economist at the Centre for Global Energy Studies, thinks it won’t, even though there are many similarities with the situation in 2008, including high oil demand.

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