Oil Drops as Libyan Rebels Agree to Keep Open Port

Rebels in Libya’s east committed to keeping open the country’s largest oil port, Es Sider, and dissociated themselves from a protest that shut a smaller crude export terminal. Brent traded near the lowest in three months.

“This incident, in the port of Brega, has no impact on the agreement with the government to open Es Sider and Ras Lanuf,” said Ali al-Hasy, a spokesman for the self-declared Executive Office for the Barqa region. “We stand by the agreement with the government. Es Sider and Ras Lanuf will stay open.”

Es Sider and Ras Lanuf, Libya’s third-largest oil port, have a combined daily loading capacity of 560,000 barrels. Brega, which was reported July 12 to have been shut by guards seeking better pay, can export 60,000 barrels a day, according to the Oil Ministry.

The Executive Office for Barqa seeks self-rule for the eastern region also known as Cyrenaica. It took control of four oil ports about a year ago, handing back two of them to the government in April and the remaining two this month.

Although located in eastern Libya, Brega was not among the four ports that fell under the rebel group’s control, and it continued to supply a refinery controlled by the government in the nation’s western region.

The July 3 agreement under which Barqa rebels agreed to surrender Es Sider and Ras Lanuf helped push Brent crude prices lower. The benchmark grade for more than half of the world’s oil closed at $106.66 a barrel on July 11, its lowest in three months. The August contract traded as low as $106.27 a barrel today in London.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza