Libya's oil output cut by up to 75 pct

Thu Feb 24, 2011 2:05pm GMT
 

By Stefano Bernabei

ROME (Reuters) - Turmoil in Libya has slashed its oil output by 75 percent or 1.2 million barrels per day, key Libyan oil sector player ENI said on Thursday.

This is the highest estimate to date of Libya's crude production reduction and has added steam to oil's price rally.

Oil surged on Thursday to near $120 a barrel because of the disruption , even though OPEC's leader Saudi Arabia has said it is willing to make up for any shortages while trading sources questioned ENI's high Libyan outage estimate.

ENI Chief Executive Paolo Scaroni said the unrest in Libya had both cut production and triggered speculation in the market. ENI is Libya's biggest foreign oil operator and has had to cut some Libyan output, as have a number of rivals.

"Naturally there is speculation which is amplifying a real phenomenon. The real phenomenon is there are 1.2 million barrels less on the market which is not a huge thing, but it is something and there is also a sense of general uncertainty in the region which can be the trigger for speculation," he told reporters in Rome.

A spokesman for ENI later clarified that Scaroni's remarks indicated Libyan daily output had fallen by 1.2 million barrels.

ENI's estimates were three times more than previous figures given by oil companies and industry sources, which had indicated more than 400,000 bpd of Libyan output had been stopped, according to Reuters calculations.

The north African OPEC member normally produces about 1.6 million bpd of high-quality oil, or almost 2 percent of world output. About 1.3 million bpd is exported, mainly to Europe.   Continued...

<p>A natural gas extraction rig known as Chunxiao in China, Shirakaba in Japan, is seen in this photo taken from Japan Maritime Self-Defence Force's P3C airplane, September 2005. REUTERS/Kyodo</p>

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.6354
Euro USD =1.2862
Rand USD =0.0905