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Released:  26/05/20172017-05-26
Word count:  250

Libya has insisted that it remains exempt from the oil output reduction deal that OPEC today decided to extend by another nine months, to March 2018. According to Libya’s ambassador to Austria, who represented the country at the cartel’s meeting, it is still producing less than half of its “original production quota.”

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OilPrice
Libya, along with Nigeria and Iran, was exempted from the original agreement, struck in November 2016, as its oil production was affected by factors other than the global glut that sank prices in 2014.

According to Platts, OPEC sources had indicated that Libya will be granted its exemption in the extended deal, as militant activity and general political instability have caused its oil output to fluctuate considerably. Just a month ago, Libya’s daily average slumped to 492,000 as militant groups blocked pipelines carrying oil from the country’s largest oil field, Sharara, and from the El Feel field to the Zawiya export terminal.

In May, however, production recovered to almost 800,000 bpd. The National Oil Corporation has plans to raise this to over a million barrels daily by the end of this year. However, an exemption would automatically undermine OPEC’s effort to push up prices by extending the cut agreement.

The success of the extension is already questionable: Brent crude and WTI actually fell after the announcement from Vienna, as traders were disappointed by the fact that the extent of the cut remained unchanged. It has become evident that despite commendable compliance rates, OPEC was largely expected to cut deeper.

Yet, as Saudi Arabia’s Khalid al-Falih told media after the announcement, the deeper-cuts option was on the table, along with the possibility of a six-month extension, but the nine-month option with quotas left as they are now came to be seen as the “safe bet.”

By Irina Slav for Oilprice.com
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Oil & Gas News
Released:  26/05/20172017-05-26
Word count:  382

Oil extended falls on Friday after tumbling in the previous session when OPEC and allied producers extended output cuts but disappointed investors betting on longer or larger supply curbs.

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Reuters
At Thursday's meeting in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day (bpd) until the end of the first quarter of 2018. The initial agreement would have expired in June this year.

Crude oil plunged 5 percent following the announcement, and held its losses early on Friday.

Brent crude futures LCOc1 were at $51.09 per barrel at 0348 GMT, down 37 cents, or 0.7 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were back well below $50, at $48.46, down 44 cents, or 0.9 percent.

Britain's Barclays bank said the price falls were a result of expectations ahead the meeting for longer or deeper production cuts.

"Some market participants may have expected either a deeper cut, a longer one, inclusion of more countries, or other such icing on the cake," the bank said.

Barclays said the ongoing production cut would result in a drawdown of bloated fuel inventories, but added that OPEC's goal of bringing stocks down to their five-year average would not be reached within the timeframe of the production cut.

Other analysts, including at Goldman Sachs and Jefferies bank said a normalization of oil inventories would occur in early 2018.

Analysts also said that the OPEC-led production cuts would support a further rise in U.S. output. Ann-Louise Hittle, vice president at energy consultancy Wood Mackenzie said that the "decision in Vienna sends a signal of continued support for oil prices from OPEC which helps U.S. onshore drillers make plans" to further increase their production.

U.S. oil production C-OUT-T-EIA has already risen by 10 percent since mid-2016 to over 9.3 million bpd, close to the output of top producers Russia and Saudi Arabia.

"OPEC agreeing to nine months without deeper cuts leaves prices at the mercy of inventories and U.S. production and demand," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Goldman Sachs warned that the biggest risk to oil markets was what would happen next year, at the end of the OPEC-led production cut.

With U.S. output rising steadily and OPEC and its allies potentially ramping up production in 2018 to regain lost market share, many traders are already expect another price slump.

(Reporting by Henning Gloystein; Editing by Richard Pullin and Sherry Jacob-Phillips)
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Released:  25/05/20172017-05-25
Word count:  368

Oil prices rose by one percent ahead of an OPEC meeting on Thursday that is expected to extend output cuts into 2018, adding at least nine months to an initial six-month cut in the first half of this year.

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Reuters
Brent crude futures LCOc1 were trading at $54.51 per barrel at 0209 GMT, up 55 cents, or 1 percent from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.87, up 51 cents, or 1 percent.

Both benchmarks have risen well over 16 percent from their May lows.

Prices have risen on a consensus that a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to cut supplies by 1.8 million barrels per day (bpd) would be extended into 2018, instead of covering only the first half of 2917.

Speculation was rife that the cuts may be extended by nine and possibly 12 months, said Jeffrey Halley, analyst at futures brokerage OANDA in Singapore.

The production cut, introduced in January, was initially only to cover the first half of 2017, but an ongoing glut has put pressure on OPEC and its allies to extend the cut at a meeting in Vienna on Thursday.

"This (extension) has been highly factored into the price of oil, and at this stage it is unlikely that we will see a deepening in the level of production cuts, with OPEC officials preferring to wait and see the impact of an extension in helping rebalance the market prior to taking any more drastic actions," said James Woods, analyst at Australia's Rivkin Securities.

Energy consultancy Wood Mackenzie said a nine-month extension "would have little impact on our price forecast for 2017, which is for an annual average of $55 per barrel for Brent."

It estimated that a nine-month extension would result in a 950,000 bpd production increase in the United States, undermining OPEC's efforts.

U.S. oil production C-OUT-T-EIA has already risen by more than 10 percent since mid-2016 to over 9.3 million bpd as its drillers take advantage of higher prices and the supply gap left by OPEC and its allies.

Should the meeting in Vienna result in a cut extension to cover all of 2018, Wood Mackenzie said the tighter market could push average 2018 Brent prices up to $63 per barrel.

Brent has averaged $53.90 per barrel so far this year.

Should the meeting in Vienna fail to agree an extended cut, traders expect oil prices to fall as this would result in ongoing oversupply.

(Reporting by Henning Gloystein; Editing by Richard Pullin)  
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Released:  25/05/20172017-05-25
Word count:  74

A new mobile air traffic control tower in arrived in Tripoli port from Italy yesterday to be installed at the capital’s Mitiga airport.

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Libya herald
The tower is one of two that Techno Sky agreed to install at the airport in a multi-million euro deal signed in Tripoli at the end of March.

A new fixed control tower is still to be built. Together they will significantly increase Mitiga’s capabilities. The March contract, due to be completed by the end of the year also includes training.

Techno Sky is a subsidiary of Italian air navigation service company ENAV.
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Released:  24/05/20172017-05-24
Word count:  397

Oil prices rose on Wednesday, supported by increasing confidence that an OPEC-led production cut aimed at tightening the market would be extended through the rest of 2017 and the first quarter of next year.

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Reuters
Brent crude futures at 0147 GMT were up 13 cents from their last close at $54.28 per barrel. U.S. West Texas Intermediate (WTI) crude futures were at $51.58, up 11 cents.

Both benchmarks have risen more than 12 percent from their May lows.

Prices have rebounded on a growing consensus that a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to cut supplies by 1.8 million barrels per day (bpd) would be extended to March 2018, instead of just covering the first half of this year.

"OPEC is meeting on 25 May with an extension of supply cuts at the top of its agenda. With oil stocks nowhere near OPEC's... objective of the recent five-year average level, an extension of cuts seems all but a foregone conclusion," French bank BNP Paribas said.

Although there have been signs of inventories dipping recently, overall stocks remain bloated following years of overproduction.

DOES BACKWARDATION HELP?

One of the main reasons why markets have not tightened more has been U.S. oil production, which has soared more than 10 percent since mid-2016 to 9.3 million bpd.

Benefiting from a market structure known as contango, in which future oil prices are higher than those for immediate delivery, U.S. drillers have sold future production in order to finance expanding output.

To stop this, some analysts, like the oil research team at Goldman Sachs, have suggested that the price curve should be pushed into backwardation, in which future oil prices are below current ones.

Whether this would stop U.S. production from rising is unclear.

"It seems of the 0.5 million bpd production growth this year, 0.4 million bpd will come from large oil companies ... that are less sensitive to factors such as the curve shape," said Virendra Chauhan, analyst at Energy Aspects.

Past crude forward curves <0#CL:> show that U.S. oil production rose at the fastest pace during times when prices were in backwardation (2011 to 2014), while output fell when the curve moved into contango from 2015.

It is possible that the backwardation between 2011 and 2014 was irrelevant as overall price levels were so high that production was profitable anyway.

Others, however, point out that U.S. producers are now so efficient that they can live with prices as low as $40 per barrel, suggesting that an extreme backwardation would be needed to squeeze them out of the market.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Sonali Paul)
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Released:  24/05/20172017-05-24
Word count:  30

Tripoli, 23 May 2017(Lana) The National Oil Company has announced that Libya's oil production has recovered reaching 788,000 bpd, following power problems which affected production at two fields in south east of the country.

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LANA - Libya news agency
Libya's oil production slumped below 700,000 bpd because of power problems in Al Msala and Sarir fields.

However, the country's production surged above 800,000 last month for the first time since 2014.

=Lana=
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Benghazi-bound passengers had a pleasant surprise when their Libyan Airlines flight from Alexandria was diverted today from Labraq because of a ghibli (dust storm) and landed instead at Benghazi’s Benina airport.

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Libya herald
Able to save themselves to 200km road journey, a number of passengers disembarked. A further surprise was that Benina, though still not officially open, appeared to be fully-staffed, with customs and immigration officials on hand to process their arrival.

The airport was badly damaged when fighting raged around it in 2014. It has since undergone repairs and modernisation. It had been due to reopen on 16 May but this has not yet happened.

Labraq, which has been closed in before by ghiblis was later declared clear and the remaining passengers completed their journey.
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Released:  23/05/20172017-05-23
Word count:  470

SINGAPORE Oil prices fell on Tuesday after U.S. President Donald Trump proposed the sale of half the country's strategic oil reserves, even as producer club OPEC and its allies cut output to tighten the market.

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Reuters
Brent crude futures LCOc1 were trading down 43 cents, or 0.8 percent, at $53.44 per barrel at 0643 GMT.

U.S. West Texas Intermediate (WTI) futures CLc1 were at $50.71, down 42 cents, or 0.8 percent.

The White House budget plan would sell off half of the nation's emergency oil stockpile from 2018 to 2027 to raise $16.5 billion from October 2018, documents released on Monday showed. It also suggested opening up more production in Alaska.

The budget, which will be delivered to Congress on Tuesday, is meant as a proposal and may not take effect in its current form. But it reveals the administration's policy hopes, which include ramping up American energy output.

The plan was released just a day after Trump left OPEC's de-facto leader Saudi Arabia following his first overseas state-visit.

A release of U.S. strategic reserves would jolt oil markets, where the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, have pledged to cut output by 1.8 million barrels per day (bpd) in order to tighten the market.

OPEC, led by Saudi Arabia, and other participating producers will meet on May 25 and are expected to extend the period of the cut from just the first half of this year to all of 2017 and the first quarter of 2018.

Oystein Berentsen, managing director for oil trading company Strong Petroleum in Singapore said the White House proposal was a surprise, but added that over a 10-year period the sales would only average around 95,000 bpd.

"It's not huge, but it won't help Saudi efforts," he said.

The bigger effect, if implemented, would be more long-term as it is planned to last a decade.

The Brent forward curve <0#LCO:> shows prices rising towards $55.60 per barrel by April 2018, and prices declining from there towards $53.75 per barrel by late 2018.

The U.S. strategic petroleum reserves (SPR) are the world's biggest, standing at around 688 million barrels, a week's worth of global oil demand. SPR-STK-T-EIA.

Sour crudes made up 60 percent of U.S. SPRs, while sweet crude made up the rest, said Virendra Chauhan of Energy Aspects.

Releasing reserves would add supplies to already high and rising U.S. production C-OUT-T-EIA of 9.3 million bpd, not far off levels of top suppliers Saudi Arabia and Russia.

The White House plan moves come after Goldman Sachs warned of "risks for a renewed surplus later next year if OPEC and Russia's production rises to their expanding capacity and shale grows at an unbridled rate."

Demand may also slow. The Organisation for Economic Co-operation and Development (OECD) said that quarterly GDP growth in the OECD area decelerated sharply to 0.4 percent in the first quarter of 2017, compared with 0.7 percent in the previous quarter.

"Our macroeconomic view remains ... price-negative, which is likely to affect the medium-term demand for crude oil," said commodities brokerage Marex Spectron.

(Reporting by Henning Gloystein; Additional reporting by Florence Tan; Editing by Richard Pullin)
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Released:  22/05/20172017-05-22
Word count:  301

May 22 Oil prices rose on Monday, supported by reports that an OPEC-led supply cut would not only be extended into next year but might also be deepened in order to tightening the market and prop up prices.

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Reuters
Brent crude futures were up 25 cents, or 0.5 percent, from their last close at $53.86 per barrel at 0035 GMT.

U.S. West Texas Intermediate (WTI) crude futures were back above $50 per barrel, trading at $50.62, up 29 cents or 0.6 percent.

Both benchmarks have risen more than 10 percent from their May lows early in the month.

Prices have been lifted by expectations that a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to cut supplies by 1.8 million barrels per day (bpd) would be extended to March 2018, instead of covering just the first half of this year to March 2018.

"Crude oil prices continued to trend higher as the market becomes increasingly confident that OPEC members will commit to a rollover in the production cut agreement," ANZ bank said in a note on Monday.

The option of deepening the production cut was also being discussed ahead of a meeting of OPEC and its allies in Vienna on May 25 to decide their output policy, sources said.

Despite this, James Woods, investment analyst at Australia's Rivkin Securities, said "the potential for deepening cuts remains limited... (as) officials are likely to monitor the impact of an extension of the cuts before they resort to such action." Woods said, however, that a deeper cut may be required to rein in oversupply.

This is because soaring output from the United States has undermined OPEC's efforts to tighten the market.

Goldman Sachs said in a note late on Friday that "the U.S. oil rig count continued its surge (last week)," and that the rig count had added 404 oil rigs since May last year, a rise of 128 percent.

U.S. oil production C-OUT-T-EIA has already risen by 10 percent, or almost 900,000 bpd, since mid-2016 to 9.3 million bpd.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Richard Pullin)
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Released:  22/05/20172017-05-22
Word count:  59

Libya's oil production partially recovered from 683,000 barrels per day (bpd) to 724,000 bpd on Thursday after a power outage affecting the Messla and Sarir fields was fixed, oil officials said.

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Reuters
Libya's national output had risen to more than 800,000 bpd for the first time since October 2014 before the power problem earlier this week.

Omran al-Zwai, a spokesman for the Arabian Gulf Oil Company (AGOCO), said production levels were gradually rising after power had been restored.

(Reporting by Aidan Lewis in Tripoli and Ayman al-Warfalli in Benghazi, editing by David Evans)
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Released:  19/05/20172017-05-19
Word count:  377

Oil futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

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Reuters
Brent crude LCOc1 was up 34 cents, or 0.7 percent, at $52.85 (40.80 pounds) at 0358 GMT. The contract earlier rose to the highest since April 21 and is on track for a 4 percent climb this week, its second week of gains.

U.S. crude oil CLc1 was up 38 cents, or 0.8 percent, at $49.73 a barrel, highest since April 26. The contract is heading for a weekly increase of 4 percent.

Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other countries, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production. As with other markets, concerns about U.S. President Donald Trump's agenda amidst investigations in Washington faded into the background.

"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers," ANZ said in a research note.

"This should see oil prices remain well bid, as OPEC continues to talk up a continuation of the production cut agreement," it said.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

Rosneft, the largest oil producer in Russia, will meet agreements with OPEC on oil output reductions, the company's chief executive told reporters in Berlin on Thursday.

Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday.

"The battle between bulls and bears is raging on oil," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"On the one hand, you have traders who worry about the efficacy of OPEC's oil cuts on inventory levels. On the other, there are those who are focussed on the real drawdowns that have started to occur in US oil stocks over the past month or so."

(Reporting by Aaron Sheldrick; Editing by Richard Pullin and Christian Schmollinger)
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Released:  19/05/20172017-05-19
Word count:  103

OilLibya, the Pan-African downstream oil and gas company has announced it is linking with Ecobank, the Pan-African banking group which will provide sophisticated ATMs at its service stations.

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Libya herald
OilLibya runs retail and wholesale operations in 18 African countries. It is revamping its forecourt operations to include convenience stores, said CEO Ibrahim Bugaighis.

His Ecobank opposite number Ade Ayeyemi said that his bank was going to be part of the OilLibya changes by offering digital banking services at its petrol stations.

Ecobank is present in 36 African countries. However, it has no operation in Libya and a spokesman told the Libya Herald that there were therefore no plans to roll out its services in the country. Ecobank, founded 23 years ago in West Africa, has vowed to have 100 million customer within the next three years
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Released:  18/05/20172017-05-18
Word count:  434

Speaking at the Libya Investment Summit 2017 in Istanbul last week, the Nasser Najem, Director of the Elmreisa Free Zone (EFZ) said that the EFZ is expected to be ready to offer investment opportunities early next year.

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Libya herald

He admitted that the situation in Libya had held the progress of the EFZ back, but he felt that despite this the project was able to make huge strides.

The 1,200-hectare free zone project, designed by British company Mott Macdonald, is divided into eleven sectors with eight sector-specific investment zones. The eight investment sectors are: financial; tourism; transformative industry; industry; oil; media; port and smart city. The remaining three sectors are the EFZ administration site, power and water utilities and the sewage treatment site.

 

EFZ sectors

Sector

Allocated area

1

Finance

50

2

Tourism

135

3

Light industry

220

4

Industry

165

5

Oil

125

6

Media

20

7

Port

240

8

Smart city

160

9

Sewage treatment

20

10

Electricity & water

30

11

Administration

5

Najem said that the EFZ is expected to be a landmark project in the beleaguered city of Benghazi, transforming the city&rsquo;s economy and catalysing its youth and its entrepreneurial spirit to new unprecedented levels. He projected that the EFZ could create over 45,000 direct new jobs aswell as 1,000 SME projects.

Najem said that a number of Libyan entities had already committed to investing in the project such as Tatweer Research, the National Oil Corporation, the Social Security Fund and some local banks.

Investors interested in the EFZ should contact the Libyan Privatization and Investment Board

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Released:  18/05/20172017-05-18
Word count:  374

Oil prices dipped on Thursday, weighed down by plentiful supply despite ongoing efforts led by OPEC to tighten the market by cutting production.

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Reuters
Brent crude LCOc1 was down 18 cents, or 0.3 percent, from its last close at $52.03 per barrel at 0244 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 was down 16 cents, or 0.3 percent, at $48.91.

The downward correction eroded gains from the previous session when prices rose on the back of a drawdown in U.S. crude inventories and a slight dip in American production.

The U.S. Energy Information Administration said on Wednesday that crude inventories USOILC=ECI fell 1.8 million barrels for the week to May 12, to 520.8 million barrels.

However, the drawdown was smaller than expected, and many traders say there is still more oil in the system than the market can absorb.

"The fall in stockpiles undershot the expectation of a 2.36-million draw," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

"OECD stocks were up 24.1 million barrels (in Q1 2017) due to a large build in January," BMI Research said. "This leaves OECD stocks 307 million barrels above their five-year average going into Q217."

In order to achieve the target of reducing these stocks to their five-year average over an extended nine-month period of supply cuts, BMI said that inventory drawdowns would have to average 25.6 million barrels per month in the three last quarters of the year.

Overall oil supplies remain ample, with large amounts of crude from the United States and other producers being shipped to the big consumer regions in northern Asia, undermining the OPEC-led efforts to tighten the market.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have pledged to cut production by almost 1.8 million barrels per day (bpd) during the first half of 2016, a deal likely to be extended until the end of March 2018.

Other producers have been quick to fill any supply gap.

Shipping data in Thomson Reuters Eikon shows that U.S. oil exports to Asia have soared from just a handful of tankers per quarter throughout 2015 and 2016, to 10 tankers in the first quarter of this year, a figure expected to rise.

North Sea oil shipments to Asia have also been at record highs this year, with 19 tankers delivering in Q1, and a similar amount expected to go to Asia in the second quarter.

(Reporting by Henning Gloystein; Editing by Richard Pullin and Joseph Radford)
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Oil prices fell on Wednesday after data showed an increase in U.S. crude inventories, stoking concerns that markets remain oversupplied despite efforts by top producers Saudi Arabia and Russia to extend output cuts.

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Reuters
Brent crude was down 41 cents, or 0.8 percent, from the last close at $51.24 per barrel at 0534 GMT. U.S. West Texas Intermediate (WTI) crude was at $48.23, down 43 cents, or 0.9 percent.

U.S. crude inventories rose by 882,000 barrels in the week ending May 12 to 523.4 million, data from the American Petroleum Institute (API) showed on Tuesday.

Brent reached $52.63 a barrel on Monday and WTI rose as high as $49.66 a barrel after Saudi Arabia and Russia agreed on the need for a 1.8 million barrels per day (bpd) crude supply cut by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers to be extended until the end of March 2018.

"The vulnerability of OPEC's ... rhetoric was starkly revealed ... as the U.S. API crude inventories showed an unexpected increase," said Jeffrey Halley of futures brokerage OANDA.

The extension of the supply cuts, which started in January and were supposed to end in June, is seen as necessary by some as they have not so far significantly tightened the market or propped up prices.

"The agreement by OPEC to extend cuts into 2018 is critical," said AB Bernstein in a note.

The International Energy Agency said on Tuesday that commercial oil inventories in industrialized countries rose by 24.1 million barrels in the first quarter of 2016, despite the cuts.

Adding to concerns of ongoing supply increases, North Sea oil production, which has long been seen as in terminal decline, is expected to jump by a net 400,000 bpd, or about a fifth of total output, in the next two years as producers improve operational efficiency.

This adds to a relentless rise in U.S. production, which has jumped by over 10 percent since mid-2016 to 9.3 million bpd, not far off top producers Russia and Saudi Arabia.

Investment bank Jefferies said it was lowering its oil price forecasts "between 3 percent (2H17) and 22 percent (2019)" due to a surprisingly strong production rise, especially in the United States.

Jefferies said its new Brent price estimate for the second half of 2017 was $59 per barrel, down from $61 previously. It lowered its forecast for 2018 Brent from $72 per barrel to $64 per barrel, and cut its estimate for 2019 from $85 per barrel to $67 per barrel.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Richard Pullin)
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Released:  17/05/20172017-05-17
Word count:  81

Afriqiyah Airways has announced the re-launch of flights between Tripoli’s Mitiga Airport and Kufra.

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Libya herald
Initially there will be two fortnightly flights during Ramadan, starting on Friday 28 May. But after Eid, the Friday fights will become weekly.

Afriqiyah served Kufra until the airport was closed in late 2015 because of security reasons.

It reopened last November, at which time Afriqiyah announced that it would shortly restart a service between Labraq and Kufra.

In the event, this did not happen until the beginning of March. There is now a weekly Afriqiyah service every Saturday between the two places.
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Released:  16/05/20172017-05-16
Word count:  420

Oil prices rose on Tuesday, extending gains after a joint announcement by top producers Saudi Arabia and Russia to push for an extension of supply cuts until the end of March 2018.

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Reuters
Brent crude futures were at $51.95 per barrel at 0457 GMT, up 13 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $48.98 a barrel, up 13 cents, or 0.3 percent from their last settlement. In order to rein in a glut, Saudi Arabia and Russia said on Monday that they agreed to the need for a 1.8 million barrels per day (bpd) crude supply cut to be extended for nine months, until the end of March 2018.

However, there is no final deal yet despite the pledge by Saudi Arabia - the world's top exporter and de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC) - and top producer Russia, as the 12 remaining OPEC members and other producers participating in the cuts have to agree to the extension during a meeting on May 25.

"It remains to be seen whether all countries participating in the deal will agree with the Saudi-Russian stance," said Sukrit Vijayakar, director of energy consultancy Trifecta.

James Woods, global investment analyst at Australia's Rivkin Securities said that oil supplies would likely remain plentiful despite an extended cut.

"As we have seen over the past six months, rising U.S. production and record inventories have kept upside limited and a nine month extension at this stage is unlikely to break that," he said.

U.S. bank Goldman Sachs said the deal "will likely further extend the oil price rebound... although the rally so far... has remained modest compared to the move that occurred last year when the OPEC cuts were first announced."

Prices are up by 2 percent since the announcement of the planned extension on Monday, compared with an over 15 percent jump in the two days following the announcement of the initial cut on Nov. 30, 2016.

Goldman said that beyond the ongoing rise in U.S. oil production, which is up over 10 percent since mid-2016 to 9.3 million bpd, output will increase by OPEC members who were exempt from the cuts, or where supply disruptions had ended, including Libya and Nigeria.

The bank said that "these combined volumes could largely offset the benefit of the extended cuts."

Goldman retained its average Brent price forecast for the third quarter of 2017 at $57 per barrel.

Crude oil inventories in the United States are expected to fall for a sixth straight week, by 2.3 million barrels, according to a Reuters poll of seven analysts ahead of weekly inventory reports from the American Petroleum Institute and the U.S. Energy Information Administration.

(Reporting by Henning Gloystein; Editing by Shri Navaratnam and Christian Schmollinger)
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Released:  16/05/20172017-05-16
Word count:  269

Ahead of the OPEC meeting on May 25 when the cartel will officially announce an output cut extension into 2018, Libya reported its daily crude oil production had reached over 814,000 barrels per day.

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OilPrice.com
A member of the board of the National Oil Corporation told Bloomberg yesterday that the resumption of production at the Sharara and El Feel fields had made the increase possible. This, based on a previous statement from Jadalla Alaokali, is more than 100,000 bpd more the amount Libya pumped at the end of April.

Sharara is the country’s largest oil field, which was shut down for three weeks because the pipeline that carried crude from it to the Zawiya export terminal was blocked. El Feel, also called the Elephant field, had been idle since 2015.

The current production rate is still far from the 1.6 million barrels the North African producer boasted before the 2011 civil war but significantly higher than what it produced last year. For this year, the NOC plans to bring the total up to 1.32 million bpd, up from an earlier target of 1.1 million bpd.

Libya has been exempted from the production cut deal that OPEC struck with 11 non-OPEC producers last December, as has been Nigeria, both having suffered production declines due to militant activity. Now both are ramping up output, while OPEC is preparing to extend the original agreement into 2018, according to a fresh joint statement from Saudi Arabia’s Khalid al-Falih and Russia’s Alexander Novak.

There is no talk that Libya or Nigeria will be pressured into joining the agreement, with the joint statement only saying that the minister hoped more oil producers will join the cuts, which will remain at the initially agreed level of 1.8 million bpd for the whole group, of which 1.2 million bpd will come from OPEC.

By Irina Slav for Oilprice.com
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Construction News

Construction News Business News
Released:  16/05/20172017-05-16
Word count:  412

Plans to rebuild and reopen the two cement factories in Benghazi’s Hawari district have been announced by the owners, the Libya Cement Company (LCC).

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Libya herald
The plants closed in mid-2014 when fighting in the area between the Libyan National Army and militants started. For almost two years, the militants effectively controlled the area and it was not till April last year that the cement works were finally recaptured.

At a recent general meeting of LCC, held in Amman, Jordan, the chairman of its parent Joint Libyan Cement Company (JLCC), Ahmed Ben Halim, said that full priority was being given to getting the Benghazi plants operational again.

However, he acknowledged that this would not be easy given that the two factories were damaged in fighting in March-April 2016.

An LCC statement says that instigations have shown the damage to be significant and that extensive re-building will be necessary. It will take at least a year before they can return to production, during which time the site will have to be made safe, new machinery and parts brought in, new skilled construction workers found and necessary utilities such as electricity and gas restored.

Fortunately, the statement notes, management took out Political Violence Insurance with Lloyds of London in 2015. The insurers have now accepted claims as legitimate, it says, adding that these are likely to run into tens of millions of euros.

LCC also owns a third cement factory in Derna’s Fataieh area which, remarkably, managed to continue operating despite being in a war zone, first between Mujahideen and the so-called Islamic State and then between the mujahideen and the Libyan National Army. At the LCC general meeting, the CEO of LCC, Robert Soloman, paid particular credit to the staff of the Fataieh factory for keeping it going.

Meanwhile, Ben Halim has welcomed a decision by the Beida-based interim government to continue paying company staff, despite the fact their Benghazi cement factory being closed .

Earlier this month, the Thinni administration confirmed that it would continue paying a minimum salary of LD 459 a month to employees of a number of foreign-owned or run companies unable to operate because of the military situation. In addition to LCC, these are the General Company for Textile and Clothing in Benghazi, the General Company for Electronics in Garyounis, Melkam Oil Company and the National Development Company for Construction.

LCC is 90-percent owned by the Joint Libyan Cement Company (JLCC), itself a joint venture between Asamar Libya and the Economic and Social Development Fund (ESDF). Asamer Libya was bought two years ago from the Austrian parent company, Asamer, by Libya Holdings Group, headed by Ben Halim.
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Oil & Gas News

Oil & Gas News
Released:  15/05/20172017-05-15
Word count:  382

Oil prices jumped over 1.5 percent on Monday after the energy ministers of the world's two biggest producers Saudi Arabia and Russia jointly said that a crude production cut would be extended from the middle of this year until March 2018.

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Reuters
Brent crude was at $51.65 per barrel at 0500 GMT, up 81 cents, or 1.6 percent, from its last close to levels last seen in early May.

U.S. West Texas Intermediate (WTI) crude was at $48.62 per barrel, up 78 cents, or 1.6 percent.

Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak said on Monday in Beijing that a joint deal to cut crude supplies would be extended from the middle of this year until the end of March 2018.

"The two ministers agreed to do whatever it takes to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to their 5-year average level, as well as to underscore the determination of oil producers to ensure market stability," the statement said.

The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de-facto leader, and other producers led by Russia, pledged late last year to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017. OPEC members agreed to cut 1.2 million bpd under the deal.

The extension of the cut will initially be on the same volume terms as before, although the ministers said they hoped other producers would join the efforts.

Russia and Saudi Arabia together produce about 20 million bpd of crude, equivalent to one-fifth of global consumption. Their political and economic clout in oil markets goes a long way to ensure that other producers who have so far participated in the cuts will also extend.

"Saudi and Russia are clearly working closely together. Saudi seems very determined to push oil prices higher by making this joint statement now," said Oystein Berentsen, managing director for oil trading company Strong Petroleum in Singapore.

OPEC is due to meet in Vienna, Austria, on May 25.

However, higher output from the United States, which did not participate in the agreement to cut supplies, has undermined the efforts by OPEC and Russia.

U.S. drilling activity last week rose to its highest since April 2015.

Current U.S. production is at 9.3 million bpd, up over 10 percent since its mid-2016 trough.

Open interest for Brent and WTI crude futures hit all-time records this month of over 2.5 million contracts open for front-month Brent, and over 2.3 million contracts open in front-month WTI.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Christian Schmollinger)
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