Libya crude production likely to be at a standstill - traders

10 March 2011 16:44  [Source: ICIS news]

LONDON (ICIS)--Libyan crude production is likely to have halted completely as oil facilities continue to be disrupted, market sources said on Thursday.

During the past few days banking analysts from Goldman Sachs and Merrill Lynch Bank of America estimated a production loss of around 1m bbl/day from the potential of 1.6m bbl/day, but oil traders now say the loss is much higher.

Physical oil traders said stocks had run out and production is likely to be very low and possibly nonexistent due to the ongoing conflict which has led to an exodus of foreign workers.

“With what is going on in the country, I find it hard to believe that anything is currently coming out of the Libyan ports,” one trader said.

Cargoes that have been loading during the last few days came from existing stocks in storage, but now they have most likely run down and with no production it is unlikely there is 600,000 bbl/day still coming out, the trader said.

With the ongoing fighting, foreign workers are not expected to return any time soon, a senior risk consultant at advisory firm AKE said.

Another trader in the Mediterranean agreed that volumes coming out of Libya are extremely low and said that in addition to production problems, there are security concerns about sending tankers to load from the Libyan terminals.

The last Libyan crude on offer in the market was a cargo of Mellitah.

The official selling price of Mellitah from the Libyan National Oil Company for March loading issued in late February was Dated BFOE plus $0.80/bbl. However, traders said most certainly the crude is being offered higher than the official price.

($1 = €0.72)

Neha Popat contributed to this article

By: Giovanni Coiro
+44 20 8652 3214

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