Tuesday, January 02, 2018 /10:50AM / FDC
Oil prices touched $67.02 per barrel (pb) on December 26th, before retreating to $66.44pb on December 27th. The uptick in price was the aftermath of the pipeline explosion in Libya. The pipeline belonging to Waha Oil Company, supplies about 90,000bpd to the Es Sider Terminal, the largest depot in Libya.
The explosion tightened the market, pushing prices 2.7% higher. Local Libyan news has reported that the blast was caused by a militancy attack. This has fuelled concerns over the impact of a resurgence in terrorist activity on Libya’s short-term production.
Libya’s oil output stood at 973,000bpd in November. This represents a 48.5% YTD increase in domestic production, after the lingering political crisis was put under control.
Analysis & Outlook
Higher oil prices are positive for Nigeria’s fiscal and dollar revenue. All things being equal, oil prices are expected to ease in the coming weeks, as the number of active U.S oil rigs inched up by 1 to 931 and the UK’s Forties pipeline is expected to resume operations in January. Prices are expected to average $61pb in Q1’18, 1.13% lower than Q4’17 average, but 11.56% higher than Q1’17.
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