Libyan oil flows as Brent hits 34-mth high

Futures top $US122 a barrel.

Oil is being loaded in Libya for the first time since mid-February, easing a squeeze on world supplies that has sent prices to near three-year highs.

The oil tanker Equator, chartered by trader Vitol Group on behalf of Qatar interests, is being loaded at the Marsa al Hariga terminal near the port of Tobruk in rebel-held eastern Libya.

The loading, if completed, would be the clearest signal of a resumption of crude exports in Libya, whose 1.3 million barrels a day of exports have been cut off by the conflict that erupted six weeks ago. The tanker can carry about one million barrels.

Since then a Nato-led air force has imposed an “no-fly” zone above Libya and knocked out defence positions held by Colonel Gaddafi’s ground forces.
Global oil markets reacted by moving in different directions today, with US-traded contracts falling while European futures rose to a 32-month high.

In New York, light, sweet crude for May delivery settled 13USc lower at $US108.34 a barrel while, in London, Brent crude on the ICE futures exchange rose to $US122.22 a barrel, its highest settlement since August 1, 2008. Prices have risen 25% in the past year.

The split reflects differences in supply and demand fundamentals between the two markets. US oil stockpiles have risen more than 20 million barrels since the beginning of the year, while supplies to Europe and Asia have been affected by continued unrest in the Middle East.

Traders do not expect Libyan supplies to return to normal any time soon, as the conflict is far from resolved. Overnight, pro-Gaddafi troops pushed back rebel forces from the port of Brega, which lies halfway between the capital Tripoli and the rebels’ base at Benghazi.