Global crude futures rise as Libya turmoil continues
London (Platts)--22Feb2011/458 am EST/958 GMT
Global crude futures were up Tuesday morning in Europe as turmoil and
protests continued to rock Libya, affecting the OPEC member's oil production.
At 0930 GMT, front-month April ICE Brent crude futures were
$107.64/barrel, up $1.89/b from the 1800 GMT close on Monday. Front-month
March NYMEX crude futures were $93.62/b at 0930 GMT, up $7.42/b from Friday's
close. The US market was closed for a public holiday Monday.
Apart from surges late Monday and early Tuesday, these levels have not
been seen since September and October 2008, respectively.
On Monday, al-Jazeera television reported that crude production at
Libya's Nafoora oil field had stopped because of a strike by workers, hours
after a tribal leader warned that oil exports from the OPEC member would be
halted unless Muammar Qadhafi ordered an end to the violent suppression of
nationwide protests. It was not possible to verify the report independently.
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One North Sea trader said that further outages were likely, hence the
stronger outright price. "It's all a bit vague but everyone thinks there are
more outages -- flat-price is up about $2/b and spreads are up," he said.
While the WTI contract was trading in steepening contango ahead of the
front-month contract's expiry and current stock levels at Cushing, Oklahoma,
putting pressure on the front end of the curve, the Brent market was trading
in slight backwardation, reversing the recent contango trend on the back of
At 0930 GMT the April/May Brent market was at a backwardation of $0.04/b,
having been as wide as $0.10/b earlier in the session.
"The market is very politics sensitive, which has caught a few people
out. It's a knee jerk reaction to what's going on in Libya," a crude futures
He added that the fluctuations in the Brent structure were all the more
pronounced due to reduced liquidity seen typically during the International
Petroleum week in London.
The global petroleum complex was also up on the unrest in Libya, with ICE
March gasoil futures at $894.75/mt, up $17.50/mt at 0930 GMT, while NYMEX
heating oil was $2.8380/gal, up 378 points. At the same time, NYMEX RBOB
futures were $2.6704/gal, up 494 points.
--Benno Spencer, firstname.lastname@example.org