Libya extinguished fires at three of five oil-storage tanks that started last week at its largest oil port, helping global crude prices to stabilize. Libya is still seeking international assistance because of possible environmental damage, said Ali al-Hasy, a spokesman for the Petroleum Facilities Guard, part of the internationally-recognized government of Prime Minister Abdullah al-Thinni. Es Sider has tanks with a capacity of 6.2 million barrels of oil, compared with current Libyan output of 352,000 barrels, according to National Oil Corp.
Oil advanced for the first time in three days amid speculation that an escalating conflict in Libya will help ease a global supply surplus that’s driven crude into a bear market. Brent futures rose as much as 1.6% in London. Fires have been extinguished at three of five tanks at Es Sider, Libya’s largest oil port, which were set ablaze after an attack by militants, said Ali al-Hasy, a spokesman for the Petroleum Facilities Guard. Algerian Energy Minister Youcef Yousfi called on the Organization of Petroleum Exporting Countries to cut output to boost prices.
The force defending oil ports in eastern Libya pushed back an onslaught that Islamist militias had started 11 days ago to capture the facilities. “We pushed them back and it’s we who are now attacking them,” Ali al-Hasy, a spokesman of the Petroleum Facilities Guard, said by phone from Es Sider, Libya’s largest oil port. “The oil ports are safe and they suffered no damage. All the fighting took place well outside the ports.”
Fighting in Libya that’s pushed oil production below consumption in the holder of Africa’s largest reserves is a reminder that not all OPEC members are in a position to defend market share by maintaining output. As Iraq plans to boost supplies next year amid repeated pledges by Saudi Arabia and the United Arab Emirates to keep pumping the same amount of crude, Libya’s National Oil Corp. said output has dropped to a “very low point.” Conflict between the government and Islamist militias has spread to the region of Mellitah, where the country’s fourth-largest oil port is located, after disrupting two other export terminals, according to the state-run company.
Libya’s oil output fell below its own consumption as fighting spread to Mellitah, a region that hosts the country’s fourth largest oil port, the state petroleum company said. National Oil Corp. already this month declared force majeure at two export terminals, Es Sider and Ras Lanuf, after an attempt by Islamist militias to capture them. Force majeure is a legal status that protects a company from liability when it can’t fulfill a contract for reasons beyond its control.
Libya’s National Oil Corp. declared force majeure at the ports of Es Sider and Ras Lanuf and will halt output at some oil fields because of fighting in the politically divided North African country. Armed factions should spare energy infrastructure in Libya, the state-run producer said in a statement on its website. Force majeure is in place at Es Sider and Ras Lanuf, Libya’s largest and third-largest oil ports, with a combined capacity of 560,000 barrels a day. The measure is a legal status that protects a company from liability when it can’t fulfill a contract for reasons beyond its control.