Four terminals that have been occupied by rebels for eight months will now be re-opened slowly, said reports. The smaller ports of Zuetina and Hariga, which have a combined export capacity of 200,000 barrels per day, are due to open immediately. Re-opening the two oil ports would double Libya’s current capacity, according to Richard Perry, market analyst at Hantec Markets.
Two bigger ports — Es Sider and Ras Lanuf — are expected to open over the next four weeks, said analysts at Commerzbank in a note. Those ports have a capacity of 500,000 barrels per day.
Crude for May delivery settled down 70 cents, or 0.7%, to $100.44 a barrel on the New York Mercantile Exchange. On Friday, crude rose nearly 1% to settle at $101.14 a barrel, the highest close since March 31. Prices still lost 0.5% for the week, partly due to concerns over an economic slowdown in China.
More hard hit on Monday was May Brent crude , which slid 90 cents, or 0.8%, to settle at $105.82 a barrel on the ICE Futures exchange. Prices declined 1.3% last week.
Commerzbank analysts said oil prices should recover during the course of this week, as the reports fall short of last week’s hope that all oil terminals might be opened within a matter of days. “The supply of oil from Libya will therefore remain severely restricted for the foreseeable future, especially since oil production in the west of the country is also hampered by protests,” said the analysts.
In addition, crude investors will also have to refocus on more unrest out of Russia over the weekend. Antigovernment protestors pushing for closer ties to Moscow seized regional government headquarters in two eastern Ukrainian cities on Sunday.
Commerzbank analysts said if the West tightens sanctions in response and imposes sanctions that affect Russian oil and gas shipments, prices of oil and gas would rise sharply. However, they don’t see this scenario unfolding immediately.
Refining towers are seen at the Zawiya oil refinery near Tripoli, Libya, on Monday, Aug. 29, 2011.
Within other contracts, natural-gas futures rose nearly 4 cents, or 0.8%, to settle at just under $4.48 per million British thermal units.
“As for natural gas, despite the likely first injection into storage for this year from Thursday’s storage report, below-normal conditions on the updated outlooks mean we will see lingering heating demand for the eastern two-thirds of the U.S. well through mid-April,” said Schneider Electric’s Smith.
May gasoline declined less than a penny, or 0.2%, to settle at just under $2.93 a gallon, and May heating oil fell nearly 2 cents, or 0.6%, to settle at $2.89 a gallon