Oil prices up on Libya unrest, hopes for output deal

SINGAPORE – Oil prices edged up in Asia on Monday, September 19, as OPEC member Venezuela indicated a deal to limit output is close and after fresh fighting in Libya.

But gains were limited by continuing worries about a supply glut.

Major crude producer states are due to meet in Algeria next week to discuss the global supply crisis and overproduction that has hammered prices for two years. 

On Sunday, September 18, Venezuelan President Nicholas Maduro said participants in the talks – the OPEC cartel and Russia – are now working on a deal and that he had discussed the issue with his counterparts from Iran and Ecuador. 

Without revealing details, Maduro said he hoped to make a firm announcement by the month’s end. 

At about 0715 GMT, US benchmark West Texas Intermediate was up 80 cents at $43.83 and Brent had risen 78 cents to $46.55. WTI sank 6.6% last week and Brent fell 4.5%.

Crude has been dogged by a stubborn supply glut since late 2014, with prices hitting near 13-year lows at the start of this year. An attempt at a deal in April fell apart when Iran, which had just emerged from years of Western nuclear-linked sanctions, refused to take part. 

OANDA senior market analyst Jeffrey Halley said in a note: “Noises from OPEC about a possible deal on production cuts, clashes around a Libyan export terminal scheduled to make its first deliveries since 2104 combined to see both Brent and WTI bounce anemically.”

Fighting erupted in Libya on Sunday as UN-backed unity government forces attempted to retake oil ports seized last week by a rival administration. 

The fighting led a Maltese-flagged tanker to turn back out to sea for safety, abandoning plans to load crude oil at Ras Lanuf. It would have been the port’s first export since 2014. 

Libya has Africa’s largest oil reserves but has exported only a few tankers of crude in recent months as a result of unrest. 

Traders are also eyeing a Federal Reserve policy meeting this week for fresh clues about the state of the world’s top economy and some guidance on its plans for interest rates.  – Rappler.com