Oil jumps after unrest hits key Opec producers Libya and Iraq
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An oil pump jack in the countryside of Syria's northeastern city of Qamishli, on Oct 26, 2019.
PHOTO: AFP
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HONG KONG (BLOOMBERG) - Oil jumped as rising tension in the Middle East and North Africa halted output and exports from key Opec producers Iraq and Libya.
Futures in New York and London rose more than 1.5 per cent. Iraq temporarily stopped output at an oil field on Sunday and supply from a second site is at risk as widespread unrest escalates in Opec's second-biggest producer. In Libya, National Oil Corp declared force majeure after Commander Khalifa Haftar blocked exports at ports under his control.
On the eve of an international summit in Berlin on Sunday, Haftar followed through on months of private warnings and crippled Libya's oil supplies by shutting down half of production. That was less than a week after he had walked out of talks in Moscow aimed at a durable cease-fire in Libya's increasingly intractable civil war.
While political unrest has simmered in Libya as competing forces tussle for control of the country, the spotlight is back on Iraq after tension earlier this month between Iran and the US led to speculation the conflict may spillover and entangle the Opec producer. Iraqi supplies are "potentially vulnerable" amid rising political risks in the country and the broader region, the International Energy Agency said last week.
West Texas Intermediate for February delivery climbed as much as US$1.19, or 2 per cent, to US$59.73 a barrel on the New York Mercantile Exchange and traded at US$59.27 as of 8:02am Singapore time. The contract fell 0.9 per cent last week.
Brent for March settlement added as much as US$1.15, or 1.8 per cent, to US$66 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a US$6.29 premium to WTI for the same month.
