June 14 (UPI) — Crude oil prices edged slightly higher early Thursday after reports of the loss of Libyan oil production, though the downturn was balanced by OPEC pledges.
The National Oil Corp. of Libya said Thursday it evacuated staff from two of its export terminals because of armed clashes in the port area. It estimated production was down about 240,000 barrels per day, more than a quarter of total Libyan output, and tanker traffic was delayed at sea.
The loss of Libyan oil production comes at a time when the oil market is showing a near-deficit in terms of levels held by the world’s leading industrialized economies. The International Energy Agency warned there’s little spare capacity to buffer against any shocks.
The price for Brent crude oil, the global benchmark, was up 0.18 percent to $76.88 per barrel as of 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.72 percent to $67.12 per barrel.
The loss was buffered somewhat by sentiment from RBC Capital Markets that members of the Organization of Petroleum Exporting Countries will agree to put more oil on the market to offset supply issues expected in the second half of the year.
OPEC members review a production curtailment agreement next week in Vienna. Amid member-state infighting between Saudi Arabia and Iran, two political adversaries, RBC said it expected the meeting would be contentious.
Speaking on Wednesday, U.S. Federal Reserve Chairman Jerome Powell said elevated crude oil prices, when compared with last year, could push short-term inflation above the Fed’s 2 percent objective, but likely not have much of an impact over the next few years.
European Central Bank President Mario Draghi said inflation was slightly below 2 percent and growth in gross domestic product was moderating.
“The latest economic indicators and survey results are weaker, but remain consistent with ongoing solid and broad-based economic growth,” he said in prepared remarks.
On the horizon, BP CEO Bob Dudley said in the company’s annual statistical bulletin, published Wednesday, that oil prices might not run much higher than they are now.
“In the oil market, yet another year of robust demand growth, combined with the production cuts of OPEC and other participating countries, allowed oil inventories to fall back towards more normal levels,” he said. “But the rapid growth of U.S. tight oil over the same period should caution us that the recent firming in oil prices is unlikely to persist.”