Supply Disruption in Libya Drives Oil Prices Upward
Oil prices jumped higher as a strain in crude oil supply reduce pressures in the market on Monday following disruption in Libya main pumping line. This development is coming ahead of the meeting of the Organization of Petroleum Exporting Countries (OPEC) and allies, resulting in higher crude prices.
Brent jumped higher due to lower supply in the market and West Texa Instrument rise amidst energy crisis in the global economy and the ongoing release from Strategic Reserves by China, United States, India and Japan among others.
A scheduled meeting of OPEC and allies will open Tuesday as members will decide on how much oil to pump in February. In 2021, the cartel had pledged to incrementally raise output by 400,000 barrels per day.
Today, the international benchmark Brent crude was trading at $78.44 per barrel, up 0.84% from the previous session’s close of $77.78. The American benchmark West Texas Intermediate (WTI) was at $75.86 per barrel at the same time, a 0.86% gain from the previous session’s trade closure of $75.21 per barrel.
Oil prices started the New Year on a positive note with Libya’s announcement on Saturday of production cuts of around 200,000 barrels of crude oil starting Tuesday due to maintenance on the main crude oil pumping line connecting the fields of Samah and Al.
It was good news for the oil market amid uncertainties from the omicron variant of COVID-19.
As the daily COVID-19 cases surpassed 345,000 in the United States, the top infectious disease expert of the country, Anthony Fauci, warned of the danger of a surge in hospitalizations due to a large number of coronavirus cases, despite early data indicating that the omicron COVID-19 variant is less severe.
On Sunday, more than 3,600 flights were cancelled around the world, more than half of which originated in the US. These cancellations added to the toll of Christmas travel disruptions caused by the omicron variant, according to a running tally on the tracking website FlightAware.com
More than 6,400 flights were delayed, including those that were delayed but not cancelled.
Investors are also keeping an eye on the meeting of producers of the OPEC group and its allies, known as OPEC+, on Jan. 4. The group will determine whether or not to boost output by 400,000 barrels per day (bpd) in February.
In their previous meeting, OPEC+ producers agreed to adhere to the planned output scheme, despite calls from several countries, particularly the US, to increase supply. #Supply Disruption in Libya Drives Oil Prices Upward.
US Carbon Dioxide Emissions from Energy Use Falls to Lowest Level
In a related development, Carbon dioxide emissions from energy consumption in the US in 2020 dropped to their lowest level since 1983 amid the COVID-19 pandemic, the US Energy Information Administration said in a report.
The US emitted 4.6 billion metric tons of CO2 in 2020, an 11% drop from 2019 and the largest annual decrease on record, the EIA said, citing its Monthly Energy Review.
In 2020, US petroleum consumption accounted for 2.0 Bmt of energy-related CO2 emissions, or about 45% of the total, with about 77% occurring in the transportation sector, according to the agency.
US natural gas consumption made up 1.7 Bmt, or about 36%, of total CO2 emissions, its largest share on record, the EIA said. Roughly 38% of the emissions from natural gas occurred in the electric power sector, while 32% occurred in the industrial sector.
Coal consumption accounted for 0.9% Bmt, or about 19%, of total CO2 emissions, which is its lowest total amount and share in the EIA’s annual data series since it started in 1973. About 90% of emissions from coal came from the electric power sector, the EIA reported.
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