Supply Disruptions in Libya and Likelihood of An Extended Output-Curb Deal Push Oil Prices Higher
Crude oil prices extended their gains on Wednesday to a second consecutive session on the back of mounting expectations that OPEC and their allies will extend their output-cut deal into the second half of this year. Besides, report showing supply disruptions in Libya also supported the prices.
According to a source at the National Oil Corporation (NOC), Libya’s oil production has been reduced by 252,000 barrels per day (bpd) due to armed protesters in Libya which blocked production in the western Libyan fields of Sharara and Wafa.
Meanwhile, OPEC-led group was said to mull over an extension to their output curb deal. After a meeting in Kuwait on Sunday, Kuwait Oil Minister Issam Almarzooq said that the group was assessing whether to extend the reductions for another six months. Iranian Oil Minister Bijan Zanganeh on Tuesday strengthened the possibility, saying the global oil cuts deal is likely to be prolonged past June.
Official data on U.S. supplies from the Energy Information Administration is due to be released later in the day. Analysts expect the weekly report to show an oil-stock rise of 1.2 million barrels. As stated by the American Petroleum Institute late Tuesday, U.S. inventories may have risen by 1.9 million barrels last week.
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