SINGAPORE: Oil prices on Wednesday slipped away from two-and-a-half year highs hit the previous session as the gradual resumption of flows through a major North Sea pipeline made up for supply disruption in Libya.
But the two outages in quick succession have highlighted how much tighter global oil markets have become a year into supply cuts led by OPEC and Russia.
US West Texas Intermediate (WTI) crude futures were at $59.73 a barrel at 0421 GMT, down 24 cents from their last settlement. WTI broke through $60 a barrel for the first time since June 2015 in the previous session.
Brent crude futures were at $66.71 a barrel, down 31 cents after breaking through $67 for the first time since May 2015 the previous day.
“Crude spiked sharply in reaction to an explosion at a Libyan pipeline...(but) the price spike came with light volumes as London was closed for Boxing Day,” said Sukrit Vijayakar, director of energy consultancy Trifecta.
Libya lost around 90,000 barrels per day (bpd) of crude oil supplies from a blast on a pipeline feeding Es Sider port on Tuesday.
Wednesday’s dips were a result of the gradual return of the 450,000 bpd capacity Forties pipeline system in the North Sea. Flows through Forties will return to normal early in the New Year, operator Ineos said.
Both the Forties and Libyan outages, which together amount to around 500,000 bpd, are small in a global context where both production and demand are approaching 100 million bpd.
But the disruptions highlight that markets have tightened significantly a year into voluntary supply restraint led by top producer Russia and the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC).
Data from the US Energy Information Administration (EIA) shows that following rampant oversupply in 2015, global oil markets gradually came into balance by 2016 and started to show a slight supply deficit this year, resulting in a reduction of global fuel inventories.
EIA data implies a slight supply shortfall of 180,000 bpd for the first quarter of 2018.
OPEC and Russia started withholding production last January, and the current schedule is to continue cutting throughout 2018.
Oil prices slip away from 2015 highs, but market remains tight
Oil prices slip away from 2015 highs, but market remains tight
Saudi Arabia opens 3rd round of Exploration Empowerment Program
RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources, in collaboration with the Ministry of Investment, has opened applications for the third round of the Exploration Empowerment Program, part of ongoing efforts to accelerate mineral exploration in the Kingdom, reduce early-stage investment risks, and attract high-quality investment from local and international mining companies.
The third round of the Exploration Empowerment Program offers a comprehensive support package targeting exploration companies and mineral prospecting license holders.
The initiative aims to lower investment risks for projects and support a faster transition from prospecting to development.
"The program provides coverage of up to 70 percent of the total salaries of Saudi technical staff, such as geologists, during the first two years, increasing to 100 percent thereafter, in line with program requirements.
This support aims to develop talent, build national capabilities in mineral exploration, promote job localization, and facilitate the transfer of geological knowledge.
The application for the third round opened on Jan. 14, allowing participants to benefit from the Kingdom’s attractive investment environment, its stable legal framework, and streamlined regulatory structures, as well as integrated infrastructure that supports the transition from mineral resources to operational mines.
The ministry has set the timeline for the third round, with the application period running from Jan. 14 to March 31.
This will be followed by the evaluation, approval, and signing of agreements from April 1 to May 31, with the eligible projects set to be announced between June 1 and July 31 of the same year.
The program stages include submitting exploration data during the reimbursement and payment phase from Sept. 1 to Nov. 30, followed by technical and financial verification of work programs and approval of the disbursement of support funds in January 2027.
The exploration data will then be published on the National Geological Database in April 2027.
The ministry emphasized that the EEP focuses on supporting the exploration of strategically important minerals with national priority. It also contributes to enhancing geological knowledge by providing up-to-date data that meets international standards, helping investors make informed decisions and supporting the growth of national companies and local supply chains.
The ministry urged companies to apply early to benefit from the program’s third round, which coincided with the fifth edition of the International Mining Conference, which was held from Jan. 13 to 15.
