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Oil surges as Libyan pipeline shutdown cripples output

Published 01/20/2020, 09:36 AM
Updated 01/20/2020, 09:40 AM
© Reuters. Oil surges as Libyan pipeline shutdown cripples output
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TOKYO, Jan 20 (Reuters) - Oil prices jumped on Monday after
two large crude production bases in Libya began shutting down
amid a military blockade, setting the stage for crude flows from
the OPEC member to be cut to a trickle.
Brent crude LCOc1 futures were up by 75 cents, or 1.2%, to
$65.60 by 0109 GMT, having earlier reached $66.00 a barrel, the
highest since Jan. 9. The West Texas Intermediate CLc1
contract was up by 60 cents, or 1%, at $59.14 a barrel, after
rising to $59.73, the highest since Jan. 10.
In the latest development in a long-running conflict in
Libya, where two rival factions have claimed the right to rule
the country for more than five years, the National Oil
Corporation (NOC) on Sunday said two big oilfields in the
southwest had begun shutting down after forces loyal to the
Libyan National Army closed a pipeline. If exports are halted for any sustained period, tanks for
storage will fill within days and production will slow to 72,000
barrels per day (bpd), an NOC spokesman said. Libya has been
producing around 1.2 million bpd recently. Also on Sunday, foreign countries agreed at a summit in
Berlin on Sunday to shore up a shaky truce in Libya, even as the
talks were overshadowed by the latest blockade.
German Chancellor Angela Merkel told reporters that the
Berlin summit, attended by the main backers of the rival Libyan
factions, had agreed that a tentative truce in Tripoli over the
past week should be turned into a permanent ceasefire to allow a
political process to take place.


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