BLBG:Brent Crude Rises After Libyan Prime Minister Seized in Tripoli
Brent crude rose after a militia detained Libya’s prime minister and removed him from a Tripoli hotel, fanning concern that the North African country will struggle to maintain oil output amid political upheaval.
Futures climbed as much as 1 percent in London. Prime Minister Ali Zaidan was taken from the Corinthia hotel by a group called the Libya Revolutionaries Operations Room, according to Hashem Beshr, the head of the Supreme Security Committee in Tripoli. Prices also gained as U.S. lawmakers indicated they’re open to a short-term increase in the debt ceiling, potentially ending a crisis that risks curbing growth in the world’s largest oil consumer.
“The security issue in Libya is supporting oil today,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London. “Tribalism across North Africa and the Middle East is certainly adding a political premium to prices, though the impact of this incident may be short-lived.”
Brent for November settlement advanced as much as $1.08 to $110.14 a barrel on the London-based ICE Futures Europe exchange, and traded for $109.75 at 9:50 a.m. London time. The North Sea crude was at a premium of $7.83 to West Texas Intermediate, compared with $7.45 yesterday, the biggest difference since Sept. 4.
WTI for November delivery gained as much as 66 cents, or 0.7 percent, to $102.27 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 1.8 percent yesterday to $101.61, the lowest since July 3. The volume of all futures traded was about 3 percent below the 100-day average.
‘Unknown Destination’
The detention of Libya’s prime minister was based on wrong information that the Public Prosecutor had an arrest warrant, Beshr said by phone today from the capital Tripoli. Zaidan was taken at dawn “to an unknown destination for unknown reasons,” the government said on its official Facebook page.
Libya, holding Africa’s biggest oil reserves, is a member of the Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s crude. The nation’s output last month slumped to the lowest in the 12-member group, data compiled by Bloomberg show.
Libyan production dropped to as little as 150,000 barrels in September, compared with this year’s high of 1.4 million in April, according to the International Energy Agency’s monthly report on Sept. 12. The country’s output had risen to as much as 700,000 barrels a day earlier this month, Oil Minister Abdulbari Al-Arusi said Oct. 1. Five of Libya’s nine export terminals were operating as of Oct. 7.
U.S. Inventories
U.S. crude stockpiles increased by 6.8 million barrels last week to 370.5 million, the highest since July 5, data from the Energy Information Administration showed yesterday. U.S. refineries cut operating rates to an average 86 percent of capacity, the lowest in more than five months.
Supplies at Cushing, Oklahoma, the delivery point for WTI futures, shrank by 168,000 barrels to 32.6 million, the EIA’s report showed. The 14-week decline is the longest since the Washington-based government agency began keeping records for the U.S. oil-storage hub in 2004.
Crude also gained today amid signs of progress in the U.S. capital in efforts to reach an agreement on a new debt limit. Congressional leaders are willing to accept a short-term increase in the country’s $16.7 trillion debt ceiling, taking a step toward averting a default, according to aides for both Republican and Democrats who spoke on condition of anonymity.
The nation’s borrowing authority will lapse if it doesn’t raise the ceiling by Oct. 17. A partial government shutdown enters its 10th day today.
Futures yesterday settled below the 100-day moving average for the second time this month, signaling a breach of technical support, according to data compiled by Bloomberg. The indicator is at $102.64 a barrel today.
To contact the reporters on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
