Oil jumps 2% as Libya set to resume exports from some ports

Oil prices rose about 2 percent on Thursday, ending a two-day slide as prices tracked a surge in gasoline futures and higher US equity markets.
Prices remained lower for the week so far. Over the previous two sessions, oil fell 6 percent, pressured by data showing large weekly builds in US petroleum products and forecasts by the world's energy watchdog and OPEC that signaled the global crude glut could persist into 2017.
Traders and investors bought to cover short positions as gasoline futures rallied 4 percent and the S&P 500 index for US equities rose nearly 1 percent.
Brent crude futures were up $1.15, or 2.5 percent, to reach a session high of $47 per barrel by 12:22 p.m. EDT (1622 GMT).
US West Texas Intermediate (WTI) crude futures rose 73 cents, or 1.7 percent, to $44.31.
"I think the oil market clearly overreacted to the products build data we had yesterday and that's indicative of today's price rebound," said Jay Hatfield, portfolio manager at New York-based InfraCap MLP, which invests in equities of energy partnerships.
"Also, we're undeniably in the $40-$50 a barrel range, which means when we get below $45, we are most likely to bounce up."
Gasoline futures shot up after sources said BP Plc will cut production this weekend by at least 50 percent on the large crude distillation unit for repairs at its 413,500 barrel per day Whiting, Indiana refinery.
Also, the profit margin for processing crude into the motor fuel hit a one-month high after a leak at the Colonial Pipeline, the nation's largest carrier system for gasoline.
US equities rose after weak US economic data dampened the likelihood of a Federal Reserve rate hike this month.
US inventories of distillates, which include diesel and heating oil, rose 4.6 million barrels in the week to Sept. 9, the US Energy Information Administration reported, much more than analysts had expected and the biggest weekly build since January.
Some analysts and traders expected oil prices to come under pressure again soon, as crude supplies return from Nigeria and Libya.
Libya's National Oil Corp. said it was lifting force majeure at three ports. In Nigeria, offers for October-loading of its Qua Iboe crude have emerged even as a force majeure remains in place.
"Exports will resume immediately from Zueitina and Ras Lanuf, and will continue at Brega ... exports will resume from Es Sider as soon as possible," NOC Chairman Mustafa Sanalla said.
"NOC is in charge of the ports," Sanalla said on Thursday, a day after visiting Zueitina. "They are secure, and we have been in contact with our foreign commercial partners."
Libya could raise output to 600,000 barrels per day (bpd) within a month and to 950,000 by the end of the year from about 290,000 currently, Sanalla said this week, but he said NOC would need new funds and blockaded pipelines in southwest Libya would need to be reopened.

Declaring "force majeuere" allows an oil supplier to break a contract because of circumstances beyond its control.
A port official at Ras Lanuf said a tanker had docked to load crude on Thursday, the first to do so since at least 2014, and that a second tanker had docked at Brega, which has remained open.
Both were arranged before the LNA seized control of the ports, the official said. In July, the Petroleum Facilities Guard force that was previously in control of the ports struck a deal with the GNA to reopen Es Sider, Ras Lanuf and Zueitina, which it had long been blockading.
On Thursday, production also resumed at the Nafoura oilfield which was shut in November 2015, an oil official said. The field previously produced 25,000-30,000 bpd.
Es Sider and Ras Lanuf ports have been damaged by militant attacks and fighting. Officials at Zueitina said it was in good condition, though only about 130 out of 550 workers had returned to their posts.

Source: Arab News