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April 04, 2011

Brent Oil above $120 and West Texas Oil at $108

Bloomberg - Brent oil for May settlement climbed $1.34, or 1.1 percent, to $120.04 a barrel on the London-based ICE Futures Europe exchange. Earlier, it advanced to $120.63 a barrel, the highest intraday price since Aug. 22, 2008. Crude for May delivery edged up 2 cents to $107.96 a barrel at 12:24 p.m. on the New York Mercantile Exchange. Earlier, it touched $108.78, the highest level since Sept. 24, 2008. Prices are up 27 percent from a year ago.



Libya has Africa’s largest crude-oil reserves and was the continent’s third-largest producer before the conflict began. Output there slumped to a “trickle” by March 1.

In addition to the recent unrest, hopes of stronger growth in the US and supply problems in western Africa have also helped to push oil prices higher.

"Oil workers in Gabon have gone on strike again today which has hit production," said Joel Hanley, managing editor at Platts.

Gabon produces between 220000 and 240000 barrels per day.

The Oildrum had an analysis yesterday of the smaller but still significant oil producers who could be disrupted.

* Yemen produces some 260 kbd of oil and exports about 100 thousand barrels per day
* Syria has about 360,000 barrels per day of oil production and exports about 150,000 barrels per day

The developing unrest could take Libyan (1.4 mbd); Yemeni (125 kbd); and maybe Syrian (148 kbd) oil from the export market. The domino that is starting to look a little unstable is Algeria at 2 mbd, but at the moment I doubt that it will go.

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