Oil price hikes as Libyan oilfields shutdown trickles production
Oil prices hiked as two major crude production in Libya shut down due to a military blockade, causing oil flow to slow down.
Brent crude LCOc1 futures rose 1.25%, or 75 cents, at $65.60 by 0109 GMT, earlier rising to $66.00 a barrel, its highest since Jan. 9. West Texas Intermediate CLcl contract rose 1%, or 60 cents, at $59.14 a barrel, earlier reaching $59.73, its highest since Jan. 10.
Amid the long-running conflict between two rival factions in Libya claiming the right to rule the country, the National Oil Corporation said that two major oilfields shut down due to a pipeline closed by forces of the Libyan National Army.
If exports halt for a long period, production will drop to 72,000 barrels per day, an NOC spokesman said. Recently, Libya produces 1.2 million barrels per day.
At a summit in Berlin, foreign countries agreed to patch up a shaky truce in Libya amid news of the shutdown.
German Chancellor Angela Merkel said that the Berlin summit agreed to a permanent ceasefire to grant a political process to take place.