By Adedapo Adesanya
The Brent crude futures edged higher on Thursday by 0.43 per cent or 28 cents to trade at $65.60 per barrel at the global oil market.
Also, the West Texas Intermediate (WTI) crude futures moved higher marginally by 0.18 per cent or 8 cents to sell at $61.43 per barrel.
One of the factors responsible for the raising of crude oil prices was the lower crude production in Libya, which was enough to offset concerns around the rampant virus resurgence in countries such as India and Japan.
Libya, which is one of the world’s top oil producers, said its production fell to about 1 million barrels per day in recent days and could further decline due to budgetary issues.
Earlier this week, the country’s National Oil Corporation (NOC) declared force majeure on exports from Hariga oil terminal, operated by its subsidiary Arabian Gulf Oil Co (AGOCO), due to a budget dispute with the central bank.
AGOCO said on April 18 it had suspended output because it had not received its budget since September.
On Wednesday, another NOC subsidiary, Sirte Oil Company, said it was unable to sustain oil output and may have to halt it completely within 72 hours due to its dire financial situation.
The country’s production fell from about 1.3 million barrels per day, the NOC said.
The market, seeking a semblance of bullish news, pointed north especially as India is diving deeper and deeper into a major crisis with infections setting new records every day.
On Thursday, the country, which is the world’s third-largest oil consumer, reported the world’s highest daily increase to date with 314,835 new coronavirus cases.
The crisis keeps worsening with most hospitals full and running out of oxygen.
Another Asian country, Japan, is facing a similar situation is expected to announce a third wave of lockdowns. The country is expected to host the Olympics in a couple of months and having just emerged from a severe economic slump last year, it is now struggling to contain both a resurgent outbreak and the economic fall-out, a double whammy of bad news for oil.
On the supply side, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) coalition is set to start returning about 2 million barrels per day of production over the next three months.
OPEC+ members are due to meet next week but major changes to the policy are unlikely, Russia’s deputy prime minister and OPEC+ sources confirmed.
Traders are also watching for a potential relaxation of American sanctions on Iran which will see the country increase its oil production, though the US has talked down the prospect of an imminent deal.
In addition, the Joe Biden led administration in the United States pledged at a climate summit attended by world leaders to slash US greenhouse gas emissions in half by 2030. It received support from other countries and this will affect oil prices in the future.
