New York — Crude futures settled higher Friday as the possibility of supply disruptions in Libya trumped last week's US crude build.
October ICE Brent settled 40 cents higher at $71.83/b, while September NYMEX crude settled 45 cents higher at $65.91/b with concerns about global production tempered by growing US crude stocks.
Protests by workers at Libya's key Zawiya oil export terminal Friday threatened production from the Sharara oil field.
The news came just a day after sources said Libyan crude production had climbed to over 1 million b/d.
Production at Sharara -- currently around 300,000 b/d -- could be shut in this weekend, sources said.
The market is still focused on the renewed US sanctions against Iran, which are due to kick back in November 4. The sanctions are expected to remove around 1 million b/d from the market.
The US is expected to increase pressure on importers of Iranian crude, with Secretary of State Mike Pompeo announcing Thursday the creation of an Iran action group. While the creation of the group does not reflect a change in US policy, it reinforces the US goal of getting to "zero oil imports" from Iran by the November 4 deadline.
South Korea is seeking a sanctions waiver from the US because it is having a difficult time replacing Iranian condensates, a government official said Friday.
The market is seeing increased production, however, ahead of the sanctions. June's OPEC meeting ended with a commitment for just under 1 million b/d of increased output, supported by Saudi Arabia and Russia.
Most recently, Iraq's Basra Oil Company said Thursday the country is exporting 3.6 million b/d through Basra ports so far in August, up from 3.54 million b/d in July.
Last week's US crude stock build surprised market analysts, who expected a decline of 1.7 million barrels. Crude stocks grew 6.8 million barrels to 414.19 million barrels for the week ended August 10, data from the Energy Information Administration showed, putting supplies 1.08% over the five-year average.
Refined products were mixed Friday, with NYMEX September RBOB settling 65 points lower at $1.9809/gal and September NYMEX ULSD settling 18 points higher at $2.0982/gal.
Gasoline and diesel crack spreads declined, with the NYMEX front-month RBOB crack at $17.29/b Friday, down 72 cents/b from Thursday. The front-month ULSD crack also declined, falling 38 cents/b to $22.21/b.
