(News Bulletin 247) – Oil prices rose on Wednesday, driven by disruptions in a major oil field in Libya and tense geopolitical news in the Middle East.

Oil prices rose on Wednesday, driven by production cuts at a major Libyan oil field and geopolitical tensions in the Middle East.

The price of a barrel of North Sea Brent crude for October delivery rose 2% to $77.98. Its American equivalent, a barrel of West Texas Intermediate (WTI), for September delivery, also rose 2% to $74.64.

“Iran’s promise to retaliate against Israel after the assassination of a Hezbollah and Hamas leader and the Libyan protests, which led to the closure of part of the Sharara field, were” factors supporting crude prices, comments Tamas Varga, analyst at PVM Energy.

A disrupted supply in Libya

The National Oil Company (NOC) in Libya announced on Tuesday the “partial” suspension of production at the al-Sharara field, operated in particular with the Spanish company Repsol and the French company Total, following protests at the site.

NOC announced the “beginning of a reduction in production at the al-Sharara field due to force majeure, following a sit-in organized by the Fezzan Movement,” a group from this region of southern Libya, the company said in a statement Tuesday.

Located about 900 kilometers south of Tripoli, al-Sharara normally produces 315,000 barrels per day, out of a national production of more than 1.2 million barrels per day.

The reduction in production from this oil field “adds to concerns about supply,” comments John Plassard, analyst at Mirabaud.

And geopolitical news in the Middle East remains at the heart of investors’ concerns, between “the dates of presumed attacks, the worrying warnings from Western intelligence services and the scattered clashes” in the region, note DNB analysts.

The war in the Gaza Strip entered its eleventh month on Wednesday, as Hamas defies Israel by electing Yahya Sinwar, one of the country’s most wanted men, and the conflict threatens to spread across the Middle East.

Tensions have redoubled following the assassination of Ismail Haniyeh, attributed to Israel, and that of Fouad Chokr, the military leader of Hezbollah who died on July 30 in an Israeli strike near Beirut.

Finally, investors will pay attention later Wednesday to the Energy Information Administration’s (EIA) weekly report on U.S. oil inventories for the week ended August 2. Analysts are forecasting a decline in both crude and gasoline inventories.

On Tuesday, the API, the American federation of professionals in the sector, had however reported a slight increase in commercial crude reserves of around 170,000 barrels and an increase of more than 3.3 million barrels of gasoline.

(With AFP)