Oil Rises to Highest Since 2008 as Libya Unrest Stokes Concern
Oil surged to the highest price in more than two years in London as violence escalated in Libya, stoking concern supplies will be disrupted as turmoil spreads through the Middle East and North Africa… “Libya is producing 1.5 million to 1.6 million barrels a day, so any unrest is concerning,” Andrey Kryuchenkov, an analyst at VTB Capital, said by phone from London. “Until things settle there, prices are underpinned.”
Crude Near 28-Month Highs On Libyan Supply Cuts
Dow Jones Newswires/Feb 22
“Libya is the first major oil exporter to be engulfed by the crisis…it has probably doubled the additional risk premium in oil prices” to around $10/barrel, according to consultancy Capital Economics.
Oil shock fears as Libya erupts
The Telegraph/Feb 22
“This is potentially worse for oil than the Iran crisis in 1979,” said Paul Horsnell, head of oil research at Barclays Capital. “That was a revolution in one country, here there are so many countries at once. The world has only 4.5m barrels-per-day (bpd) of spare capacity, which is not comfortable.”… While Egypt is a minor oil player, Libya’s Sirte Basin holds Africa’s largest reserves and supplies 1.4m bpd in exports, mostly to Italy, Germany and Spain.
IEA sees oil price danger, ready to use stockpiles
High oil prices were detrimental to the interests of both consumers and producers as they could derail economic growth and curtail fuel demand, the International Energy Agency’s Fatih Birol said. “Oil prices are a serious risk for the global economic recovery,” Birol told reporters on the sidelines of an energy conference in Indonesia on Tuesday. The IEA is adviser to 28 industrialised nations on energy policy. \”The global economic recovery is very fragile — especially in OECD countries,” Birol said, adding that oil prices had entered a “danger zone” for the recovery at above $90 a barrel.
Oil prices surge on fear of Libyan unrest
Washington Times/Feb 21
International Energy Agency official David Fyfe said the prospect of an interruption in oil production in the Middle East is “a real concern” because the region lays claim to 60 percent of the world’s proven oil reserves and 40 percent of global gas resources… He emphasized that major consuming nations such as the U.S., Japan and Germany have stockpiled 1.6 billion barrels of oil — enough to provide 4 million barrels a day for a year — in preparation for any disruption… Libya exports about 1 million barrels a day, primarily to European customers. The U.S. strategic reserves have been tapped twice in emergencies — once during the Persian Gulf War in 1991 and again after Hurricane Katrina interrupted U.S. production in the Gulf of Mexico in 2005.
Oil Statistics For Libya
U.S. Energy Information Administration
Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), holds the largest proven oil reserves in Africa, followed by Nigeria and Algeria. According to Oil and Gas Journal (OGJ), Libya had total proven oil reserves of 44 billion barrels as of January 2010, the largest reserves in Africa…
With domestic consumption of 280,000 bbl/d in 2009, Libya had estimated net exports (including all liquids) of 1.5 million bbl/d. According to 2009 official trade data as reported to the Global Trade Atlas, the vast majority of Libyan oil exports are sold to European countries like Italy (425,000 bbl/d), Germany (178,000 bbl/d), France (133,000 bbl/d), and Spain (115,000). With the lifting of sanctions against Libya in 2004, the United States has increased its imports of Libyan oil. According to EIA estimates, the United States imported an average of 80,000 bbl/d from Libya in 2009, up from 56,000 bbl/d in 2005 but, as a result of the U.S. economic downturn and subsequent decline in oil demand, 2009 levels were below 2007 highs of 117,000 bbl/d.
CIA World Factbook
The Libyan economy depends primarily upon revenues from the oil sector, which contribute about 95% of export earnings, 25% of GDP, and 80% of government revenue. The weakness in world hydrocarbon prices in 2009 reduced Libyan government tax income and constrained economic growth. Substantial revenues from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa, but little of this income flows down to the lower orders of society. Libyan officials in the past five years have made progress on economic reforms as part of a broader campaign to reintegrate the country into the international fold. This effort picked up steam after UN sanctions were lifted in September 2003 and as Libya announced in December 2003 that it would abandon programs to build weapons of mass destruction.