26 October 2016

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Bloomberg: Oil rebounds as fighting halts Libya's Ras Lanuf export return

Oil rebounded from the lowest close in more than a month after clashes halted what would be the first crude shipment from Libya's Ras Lanuf export terminal since 2014, according to Bloomberg.


Futures rose as much as 2.1 percent in New York after losing 2 percent Friday, Bloomberg wrote.

The tanker Seadelta suspended loading after fighting started Sunday between local Petroleum Facilities Guard units and forces loyal to eastern-based military commander Khalifa Haftar. OPEC may call an extraordinarymeeting if ministers reach consensus at an informal gathering next week, Secretary General Mohammed Barkindo said, according to Algerian Press Service.

Oil has fluctuated since rallying in August on speculation the Organization of Petroleum Exporting Countries and Russia will agree on measures to stabilize the market at the meeting Sept. 27 in Algiers. Prices tumbled 6.2 percent last week amid concern theresumption of shipments from Libya, as well as Nigeria, would worsen a global glut.

"There is some risk covering based on the disruption in Libya," said Ric Spooner, a chief market analyst at CMC Markets in Sydney. "That's an appropriate response given the market was reacting to the possibility of a significant supply increase from Libya and Nigeria."

West Texas Intermediate for October delivery, which expires Tuesday, gained as much as 88 cents to $43.91 a barrel on the New York Mercantile Exchange and was at $43.79 at 1:49 p.m. in Hong Kong. The contract fell 88 cents to settle at $43.03 a barrel on Friday, the lowest close since Aug. 10. The more-active November contract was 72 cents higher at $44.34 a barrel.

Brent for November settlement added as much as 85 cents, or 1.9 percent, to $46.62 a barrel on the London-based ICE Futures Europe exchange. Prices declined 82 cents, or 1.8 percent, to $45.77 a barrel on Friday. The global benchmark traded at a $2.13 premium to WTI for November delivery.

For a story on hedge funds cutting bets on lower and higher prices, click here.

The fighting in Libya forced the tanker Seadelta to suspend the loading of 781,000 barrels of oil for shipment to Italy, Nasser Delaab, petroleum operations inspector at Harouge Oil Operations, said by phone. The tanker, which began loading earlier Sunday, sailed away from Ras Lanuf and may return to the port to finish taking on oil on Monday, he said.

OPEC members are close to reaching an agreement on how to stabilize the market, Venezuelan President Nicolas Maduro said Sunday at a press conference after speaking to his counterparts from Iran and Ecuador. Maduro said he hopes an accord can be reached by the end of the month.

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