Libyan oil exports could reach 355,000 bpd soon -Goldman Sachs

SINGAPORE, June 22 Wed Jun 22, 2011 5:50am EDT

SINGAPORE, June 22 (Reuters) - Libyan crude exports could hit 355,000 barrels a day in the short term from the rebel-controlled east, and that level is unlikely to prevent prices from heading higher in the second half of the year, U.S. bank Goldman Sachs said in a report.

Exports from the North African producer could touch 585,000 bpd from additional shipments from fields in the west if there was a change in the government, the report dated Tuesday said.

Libyan oil production fell from 1.58 million bpd in January to just 100,000 bpd in May, while exports have stopped entirely, according to the International Energy Agency.

"The opposition forces could resume about 200,000 bpd of crude exports as some fields and their related export terminals are largely intact. A further 155,000 bpd could potentially be exported at a later stage from a second loading port under their control," Goldman Sachs said.

However, bringing back the remaining 1 million barrels of lost production will be challenging as some export terminals remain under government control, while several oil installations have also been severely damaged.

Supply disruptions in Libya and unrest in other oil producers in the region have put a premium of around $10-$20 a barrel to prices, traders and analysts have said.

Goldman Sachs said the recent slump in crude is temporary, and expects trading to remain volatile in the near-term before strong demand from China and India drives prices higher in the second half of 2011.

"We expect upward pressure on oil prices to increase in 2H11 as slower, but sustained, oil demand growth draws on inventory and OPEC spare capacity."

Oil prices suffered their biggest weekly losses since early May last week on concerns over weaker economic outlook and the European debt crisis. (Reporting by Francis Kan; Editing by Manash Goswami)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.