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Bloomberg
Oil retreated from its highest close in more than two years amid low volume, even as a pipeline carrying crude to Libya’s export terminal was said to need a week for repairs following an explosion.
Brent and West Texas Intermediate crude futures both slipped after the US benchmark rose 2.7 percent, breaching $60 a barrel for the first time since June 2015. A pipeline run by Waha Oil Company that carries crude to Libya’s Es Sider terminal exploded, reducing output by 70,000-100,000 barrels a day. The repair work will take about a week, according to people familiar with the situation. Meanwhile, Saudi Arabia is said to expect oil revenue to jump about 80 percent by 2023 to help the kingdom record its first budget surplus in a decade.
Oil is heading for a second yearly advance as the Organization of Petroleum Exporting Countries and
its allies including Russia prolong supply curbs through the end of 2018. Prices gained this month
after a separate pipe in the UK — one of the most important conduits in the world — was shut beca-
use of a crack. Partial flows have now restarted at the Forties Pipeline System’s Kinneil facility, operator Ineos Group said.
“The market is having a counter-reaction to the jump yesterday,†said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “It remains supported by the news out of Libya but at the same time liquidity is very poor.â€
West Texas Intermediate for February delivery was 42 cents lower at $59.55 a barrel on the New York Mercantile Exchange at 10:47 a.m. in London. Total volume traded was about 28 percent below the 100-day average. Futures rose as high as $60.01 a barrel in the previous session, when volume was about 30 percent below the 15-day average of 1.1 million contracts.
Brent for February settlement lost 76 cents trade at to $66.26 a barrel on the London-based ICE
Futures Europe exchange.
Prices climbed 2.7 percent, to $67.02 a barrel, the highest close since May 2015. The global benchmark crude traded at a premium of $6.70 to WTI.
Output in Libya, where oil fields have endured sporadic shutdowns and disruptions due to protests, power blackouts and fighting, earlier peaked at just over 1 million barrels a day, the highest level in four years. Any drop in production due to the blast that occurred 130 kilometers (81 miles) south of Sidra will ease pressure on OPEC-led efforts to drain a glut.