UPDATE 8-Oil rises as Libya declares force majeure in oilfields

* Libya NOC: Force majeure on Sharara, El Feel oilfields
* Oil market remains well supplied - analysts
* Iraq oilfields unaffected by unrest - officials
* Graphic on Libya export: https://tmsnrt.rs/30D1s02

(Updates prices)
By Bozorgmehr Sharafedin
LONDON, Jan 20 (Reuters) - Oil prices rose to their highest
in more than a week on Monday after two large crude production
bases in Libya began shutting down amid a military blockade,
risking reducing crude flows from the OPEC member to a trickle.
Brent crude LCOc1 settled up 35 cents, or 0.5%, at $65.20,
having earlier touched $66 a barrel, its highest since Jan. 9.
West Texas Intermediate CLc1 last traded 12 cents, or 0.2%
higher, at $58.66 a barrel, after rising to $59.73, the highest
since Jan. 10.
Two major oilfields in southwest Libya began shutting down
on Sunday after forces loyal to Khalifa Haftar closed a
pipeline, potentially cutting national output to a fraction of
its normal level, the National Oil Corporation (NOC) said.

NOC declared force majeure on crude loadings from the
Sharara and El Feel oilfields, according to a document seen by
Reuters. The closure, which follows a blockade of major eastern oil
ports, risked taking almost all the country's oil output
offline.
However, the earlier rise in oil prices eased after some
analysts and traders said supply disruptions in Libya will be
short-lived and could be offset by other producers, limiting the
impact on global markets.
"The oil market remains well supplied with ample stocks and
a healthy spare capacity cushion. In other words, the bullish
price impact may prove to be fleeting," said Stephen Brennock of
oil broker PVM.
Amrita Sen, chief oil analyst at Energy Aspects, added: "We
expect the current scale of outages to be fairly short-lived...
as there is limited upside for Haftar to slow the country's oil
revenues to a trickle."
"The current closures are clearly a power play aimed at
boosting Haftar's leverage amid international efforts to broker
peace in the country."
Foreign powers agreed at a summit in Berlin on Sunday to
shore up a shaky truce in Libya, which has been in turmoil since
the fall of Muammar Gaddafi in 2011.
If Libyan exports are halted for any sustained period,
storage tanks 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. prolonged disruption from Libya would be enough to swing
the global oil market from surplus to deficit" in the first
quarter of 2020, said ING analyst Warren Patterson.
Meanwhile in Iraq, another major oil producer, two police
officers and two protesters were killed as anti-government
unrest resumed after a lull of several weeks.
However, production in southern oilfields was unaffected by
the unrest, officials said. Market activity was thin on Monday due to the Martin Luther
King Jr. holiday in the United States.
Natural gas futures NGc1 last traded down 3.2% to $1.94
per million British thermal units. Prices have been under
pressure from milder winter temperatures. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART: U.S. oil may test resistance zone of $60.05-$60.34
Brent oil may bounce more to $66.68 Libyan oil production https://tmsnrt.rs/2R7sx8G
Libya Crude Exports By Port png https://tmsnrt.rs/2R9W4hP
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