Oil prices are on the rise as Libya’s state-run National Oil Corp. declares a force majeure on loadings of Sharara crude from the Zawiya oil terminal and on loadings of Wafa field condensate from the Mellitah terminal and drop-in oil inventory at the Cushing, Oklahoma NYMEX delivery point. That was the first drop in five weeks at the storage hub and while overall supply did rise, it was slightly less than expected. Today oil not only awaits confirmation from the Energy Information Administration report on supply but also must worry how the market is going to take the UK official notice of Brexit from the European Union. The corresponding rise in the dollar is lowering crude oil rise even with a lot of bullish technical and unfatal support. There is also joy in energy land as President Donald Trump rolled back EPA climate rules.

Source: TheDailyBeast

A few weeks ago I said that anyone betting on Libya’s oil production to be sustained might go broke. The complex situation in Libya is making OPEC production cuts really bite. OPEC skeptics have constantly been wrong about the cartel and their ability to comply with cuts. They also argued that even if they did comply with cuts countries like Libya, with no quota, would make up that void. How is that working for them. While it is unclear how long the outage and force majeure will remain, the larger question may be how long they can keep exporting after they resume. Libya has a long way to go before anyone can take them seriously as a reliable supplier of oil.

This will play into OPEC hands as more and more producers signal an extension of the OPEC cuts. Non-OPEC Oman said they would extend cuts and Iranian oil minister Bijan Zanganeh said that there was likely to be an extension of the oil production cuts.

The American Petroleum Institute supply report was supportive to the market. The API reported an increase of 1.91 million barrels against expectations of 2 million barrels. Cushing, Oklahoma fell by 576,000 barrels and that was the first draw in five weeks, Gasoline supply also fell by 1.1 million barrels and distillates a bullish 2.04 million barrels.

U.S. oil exports hit a modern-day record! Can you guess what country other than Canada imported the most U.S. oil? The Netherlands! Yeah, that’s what I said. The U.S. Energy Information Administration’s (www.eia.gov) reported this news in an energy brief that looks at how more countries are importing U.S. crude oil. The EIA says that “In 2016, U.S. crude oil exports averaged 520,000 barrels per day (b/d), 55,000 b/d (12%) above the 2015 level, despite a year-over-year decline in domestic crude oil production. Even though oil exports have increased, growth in U.S. crude oil exports has slowed significantly from its pace from 2013 to 2015, when annual U.S. crude oil production grew rapidly. Following the removal of restrictions on U.S. crude oil exports in December 2015, the United States exported crude oil to 26 different countries in 2016, compared with 10 countries the previous year. In 2015, 92% of U.S. crude oil exports went to Canada, which was exempt from U.S. crude oil export restrictions. After restrictions were lifted, Canada remained the top destination but received only 58% of U.S. crude exports in 2016.”