Markets retreated a bit yesterday, but this morning are on track to recapture their gains and close the week strong. A weaker dollar is providing some support along with on-going political and geopolitical uncertainty. Crude is currently trading at $64.16, up 58 cents.
Fuel prices are receiving a lift as well. Diesel prices are trading at $2.0757, up 0.9 cents. Gasoline prices are $2.0333, up a more meager 0.2 cents.
In Libya, the National Oil Company’s head Mustafa Sanalla warned markets that the advance of militant forces on the country’s capital “could wipe out” Libya’s production. At its peak, Libya can produce around 1 MMbpd of crude oil. Most at risk is their largest oil field, El Sharara, which is often a target during domestic upheavals.
OPEC sources indicated that OPEC would only raise its output quotas if crude surpassed $80/bbl (for America’s WTI crude, that’s roughly $73/bbl) or if Venezuela and Iran suffer significantly steeper losses in the coming months. Of course, recent comments from Russia have indicated a desire to exit the deal and lift their production, though Putin later commented that it’s too early to make a decision on cuts. The OPEC source also hinted that any increase in output would be less than 1.2 MMbpd, which is the current cut level – meaning OPEC will still be actively regulating prices, just at a slower pace.