RIYADH: Oil prices rose for a second day on Tuesday as a key pipeline supplying the US, the world’s biggest crude consumer, remained shut and on expectations loosening COVID restrictions in China, the second-biggest user globally, will boost demand.
Brent crude futures rose $1.03, or 1.32 percent, to $79.02 per barrel by 08.10 a.m. Saudi time, while US West Texas Intermediate crude futures gained 96 cents, or 1.31 percent, to $74.31.
The closure of TC Energy Corp.’s Keystone Pipeline, which ships about 620,000 barrels per day of Canadian crude from Alberta to the US, has tightened supplies and raised the prospect that inventories at the Cushing, Oklahoma, storage hub will decline. Cushing is also the delivery point for the WTI crude futures contract.
Keystone has remained shut since a 14,000-barrel leak in the US state of Kansas reported on Dec. 7. TC Energy has not released a timeline for a restart of the line, which carries crude to refineries in the Midwest and Gulf Coast.
Libyan oil production at 1.2 million barrels per day: Minister
Libya is producing about 1.2 million barrels per day of oil, Oil Minister Mohamed Oun told reporters on the sidelines of a meeting organized by the Organization of Arab Petroleum Exporting Countries.
“We hope to return to 2010 levels, which was 1.6 million bpd, within two or three years,” he added.
He added that he hoped that Libya’s decision to lift force majeure on oil and gas exploration, which was announced last week, would encourage foreign oil companies to return to the country.
Meanwhile, figures from Nigeria’s petroleum regulator suggested that the country’s oil production rose to 1.185 million bpd in November from 1.014 million barrels in October.
Timipre Sylva, minister of state for petroleum resources, said Nigeria is working to meet its oil production quota decided by the Organization of Petroleum Exporting Countries, of 1.8 million bpd by the end of May next year.
Europe’s gas market faces risks from EU price cap: Official
A European Commission plan for a gas price cap risks reducing liquidity in Europe’s gas market, posing a threat to how it functions, the head of trading at Norwegian oil company Equinor told Reuters, but its own gas deliveries will not be affected.
The aim of the cap is to shield European consumers from the surge in energy prices they have faced since Russia invaded Ukraine, and which has helped to fuel inflation.
For Equinor, the biggest concern is what happens to the liquidity in the gas market, Helge Haugane, Equinor’s head of gas and power trading, said in an interview.
Haugane has previously raised the alarm on market liquidity. In September, he warned that some 1.5 trillion euros ($1.58 trillion) tied up in the margin calls that traders pay to protect against defaults could squeeze gas and power market liquidity and see smaller market participants struggling.
But he said this was no longer a “big issue,” with margin calls now only “a fraction” of what they were at the end of August.
“I think the price cap is the one that we need to pay attention to,” Haugane said.
“From the Equinor perspective, we should still be able to get our gas to the markets and we should get the gas to the markets where it’s needed the most,” Haugane said of the Commission’s proposal.
(With input from Reuters)
