Oil Binaries will be Impacted by Reports of Saudi Oil Pipeline Explosion

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Explosion at major oil pipeline in Libya – sources

The Mediterranean port of Es Sider, also spelled as Sidr and Sidra, features the largest oil depot in Libya. The blast occurred near Marada, on the pipeline belonging to the Waha oil company, the source told Reuters.

Unverified photos of what is said to be a plume of black smoke coming from the site of the pipeline explosion are being shared on social media.

A military source told RIA Novosti that the “large” explosion at the pipeline was the result of a terrorist attack, carried out with the use of “an improvised explosive device.” The Libyan armed forces heard the blast from a distance of 20 kilometers and headed in that direction, while the militants retreated, the source added. “The fighters belonged to either (al-Qaeda-affiliated) Benghazi Defense Brigades or Islamic State (IS, formerly ISIS/ISIL) as they are terrorists who carry out diversions to cripple oil production facilities.”

The news of the Libyan blast saw oil prices spike to above $65 a barrel on Tuesday, trading close to its highest mark since mid-2020. Another factor contributing to the increase in price are the voluntary supply cuts by OPEC. Brent crude, the international benchmark for oil prices, went up 10 cents to $65.35 a barrel, while US crude added 12 cents at $58.59, Reuters reported.

The port of Es Sider changed hands on several occasions during the Libyan civil war, which started in 2020. It was severely damaged by the fighting, and remained closed between 2020 and 2020. This March Es Sider, which was shipping around 447,000 barrels per day when the conflict started, was recaptured by forces loyal to Libya’s eastern-based military commander, Khalifa Haftar, and resumed operations.

WTI crude oil hits $60 per barrel for the first time since mid-2020

Crude oil traded at its highest level since mid-2020, supported by an explosion on a crude pipeline in Libya and voluntary OPEC-led supply cuts.

The move towards restart of a key North Sea pipeline, Forties, capped the rally. The pipeline is being tested after repairs and full flows should resume in early January, its operator said on Monday.

Brent crude, the international benchmark for oil prices, rose $1.69, nearly 3%, to $66.42 a barrel at 2:30 p.m. ET. West Texas Intermediate Crude oil, the US benchmark, added nearly 3% and briefly hit $60 per barrel.

“The confirmation that Forties is coming back . has the potential for capping Brent,” said Olivier Jakob, analyst at Petromatrix.

Trading activity was thin due to the Christmas holiday in many countries.

Oil turned positive following the explosion at the Libyan pipeline, which feeds the Es Sider terminal. It was not immediately clear what impact the blast will have on Libyan output, which has been recovering in recent months after being hampered for years by conflict and unrest.

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Brent has risen 17% in 2020. The Organization of the Petroleum Exporting Countries, plus Russia and other non-members, have been withholding output since Jan. 1 to get rid of a glut.

The producers have extended the supply cut agreement to cover all of 2020.

Iraq’s oil minister said on Monday there would be a balance between supply and demand by the first quarter, leading to a boost in prices. Global oil inventories have decreased to an acceptable level, he added.

That is earlier than predicted in OPEC’s latest official forecast, which calls for a balanced market by late 2020.

While the OPEC action has lent support to prices all year, the unplanned shutdown of the Forties pipeline on Dec. 11 pushed Brent to its mid-2020 high.

Forties plays an important role in the global market as it is the biggest of the five North Sea crude streams underpinning Brent, the benchmark for oil trading in Europe, the Middle East, Africa and Asia.

Rising production in the United States is offsetting some of the OPEC-led cuts.

The US oil rig count, an early indicator of future output, held at 747 in the week to Dec. 22, according to the latest weekly report by Baker Hughes.

(Additional Reuters reporting by Henning Gloystein; Editing by Peter Graff and John Stonestreet)

Explosion Hits Oil Pipeline Leading to Libya’s Port – Reports (PHOTO)

While the reasons for the explosions haven’t been determined yet, media reports are suggesting that it was possibly a terrorist attack.

An explosion has hit an oil pipeline, leading to Libya’s port Es Sider sea terminal, a source in the Libyan National Army told The Libya Times Tuesday, adding that the blast occurred 30 km northwest of Marada.

At the same time, the source accused militants from the Benghazi Defense Brigades of the blast.

#Breaking: #LNA sources accuse islamist militants from ‘the #Benghazi Defense Brigades’ of blast targeting the main pipeline linking the Sidrah terminal and #oil fields belonging to al-Waha company. The attack took place about 30km northwest of Maradah. #Libya pic.twitter.com/DjDqj0qQHk

The Akhbar Libya news outlet reported, citing a group that operates in Marada, that the gas pipeline belonged to the al-Waha oil company. The group’s press service claimed that the explosion could have been caused by a terrorist attack, adding that the communication with an engineering crew working on the scene had been lost.

The media outlet added that the group had sent its forces to the explosion site, located between Es Sider port and an oil field.

Oil moved higher above $65 a barrel on Tuesday, within sight of its highest since mid-2020, supported by an explosion on a crude pipeline in Libya and voluntary OPEC-led supply cuts.

Last month, the Libyan interim government that controls the east of the country reopened a commercial port in the city of Benghazi, after it had been closed for three years due to the turmoil in the country.

Libya has been mired in a civil war since its longtime leader Gaddafi was overthrown in 2020. A UN-backed government of national accord controls the country’s west and has its headquarters in Tripoli. Eastern Libya is governed by a parliament based in Tobruk, which is backed by the Libyan National Army loyal to Gen. Khalifa Haftar.

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Explosions Destroy Saudi Oil Pipeline, Sends Oil Prices Soaring

A massive explosion has destroyed Saudi Oil pipelines sending an uncontrolled source of fuel on fire and crude oil prices soaring.

Among the many factors responsible for the jump in WTI to just shy of $109 over the past hour, and Brent to new records in various currencies, is the following news reported so far only by Iranian PressTV:

An explosion has hit oil pipelines in the flashpoint Saudi Arabian city of Awamiyah in the kingdom’s oil-rich Eastern Province.

And some more from Arabian Digest:

Saudi Arabia’s Eastern Revolution hits the oil sector: pipeline under fire

For the first time in decades, the Eastern Saudi Arabian volatile situation has reached the vital oil sector. A pipeline between Awamiya and Safwa has been reportedly targeted, and is under fire. Saudi Arabia’s Shiite minority, mostly residing in the oil rich east, has been protesting for years against State sponsored discrimination. They are treated as second class citizens, denied public sector jobs, and vital development for their oil rich areas. Saudi Arabia’s powerful Wahhabi religious establishment considers Shiites heretics, and constantly incites against them.

Security forces have killed two protesters in Awamiya, Eastern Saudi Arabia. They are launching a series of arrests and raids on houses, schools and mosques. This is Awamiya this evening, protesters have blocked the Police road after arrests in the town.

And now back to your regularly scheduled deflation.

And another update this time a video showing Awamiya, Eastern Saudi Arabia, where the oil fields can be seen from minute three onward.

Another update from Arab Digest:

A new photo of the pipeline under fire, from our Qatif correspondent:

The Eastern region is where most of the oil fields are based. The events, if they continue, might force Saudi Arabia to lower its production expectations this year, thus affecting world supplies, and possible the world economy.

A quick review of the proximal refinery courtesy of Saudi Aramco

Ras Tanura Refinery

The most complex Saudi Aramco refinery is on the Arabian Gulf at Ras Tanura with a crude distillation capacity of 550,000 barrels per day (BPD). Ras Tanura Refinery also has a 305,000 BPD NGL processing facility, a 960,000 BPD crude stabilization facility, 145/158 MW (summer/winter) of combined steam and gas turbine electrical power generation plants, a combined 150 lb and 600 lb steam capacity of 6,217 Mlb/hr, and 75 crude oil and products storage tanks with a combined capacity of 5.8 million barrels.

Ras Tanura Refinery’s major refining facilities include a 325,000 BPD Crude Distillation Unit, a 225,000 BPD Gas Condensate Distillation Unit, 50,000 BPD hydrocracker and a total of 107,000 BPD capacity of catalytic reforming. Ras Tanura Refinery is the only Saudi Aramco refinery that contains a Visbreaker (60,000 BPD). This refinery also produces 17,000 BPD of asphalt, more than any other refinery in the Kingdom. Crude is normally transferred to Ras Tanura through a pipeline and can also be supplied by ship. Most of Ras Tanura’s production is for domestic use and transferred to the Dhahran bulk plant, while some products are exported.

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