Brent Above $109 As Situation In Libya Deteriorates
Unrest in Libya continued to support Brent prices on Tuesday, keeping it steady above $109.
The commodity traded at $109.53 at 6:31 GMT on Tuesday morning as investors kept a close eye on developments in the North African nation.
After the Libyan government reached a deal with rebel groups and began the process of reopening the nation’s oilfields, violence broke out in Tripoli, which set back progress and delayed the reopening of the nation’s western oilfields El Sharara and El Feel. The nation’s oil output has fallen to 210,000 barrels per day, much lower than last year’s 1.4 million barrel per day capacity.
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CNBC reported that several energy companies are cutting down on their presence in Tripoli as militia groups clash and violence increases.
Algerian state energy firm Sonatrach decided to evacuate its workers from Libya, while French oil major Total announced on Monday that it was reducing its presence in Tripoli due to safety concerns.
The Ukraine crisis also supported Brent prices as most don’t expect to see a resolution in the near future. NATO said that despite Russian President Vladimir Putin’s announcement that he had withdrawn troops from Ukraine’s borders, there has been no sign of movement.
However, progress was made between Russia and Ukraine on their dispute over natural gas supplies. Russia had threatened to cut off energy supplies to Ukraine if Kiev didn’t pay an outstanding debt to Moscow by the beginning of June.
On Monday, Europe’s Energy Commissioner said the two sides had made progress and that a new round of talks is on the books for May 26.
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