Turmoil in Nigeria, shale bankruptcies in the United States and Venezuela have contributed to tightening crude oil supplies. Oil prices rose as a result yesterday. However, despite this, brimming inventories across the world were preventing supply shortfalls and sharper price spikes, traders said.
International Brent crude futures were trading at $49.10 per barrel, up 29 cents or 0.59 percent from their last settlement. U.S. West Texas Intermediate crude futures was up 39 cents, or 0.81 percent, at $48.55 a barrel. ANZ bank said that unexpected supply disruptions across the world, excluding output falls in the United States, amounted to around 2.5 million barrels of daily production, virtually erasing a production overhang that had pulled down prices by over 70 percent between 2014 and early 2016.
“The supply disruptions inflicting the oil market continue to ratchet up… As these issues linger, we expect an increasing supply risk premium will price into the market,” the bank said.
Nigeria’s oil production showed further signs of strain as intruders blocked access to Exxon Mobil’s terminal exporting Qua Iboe, the country’s largest crude stream.
Libyan output has also been hit by internal conflict. Militant activity in the oil-rich Niger Delta has taken out some 500,000 barrels per day of crude oil production from other companies in Nigeria, pushing oil output in Africa’s largest-producing nation to more than 22-year lows.