LONDON: Libya is not ready to start pumping oil from fields held by rebels in the east of the country, a spokesman for rebel-held oil firm Arabian Gulf Oil Company (Agoco) told Reuters, dampening hopes for a quick resumption of exports.“We are not producing. Everything is under repair. I can’t tell you a date to restart,” Agoco information manager Abdeljalil Mayouf said.
The official was speaking in response to a report in trade publication Petroleum Economist that repairs at the Sarir and Misla oil fields had been completed and oil production was imminent.
Before the war, Libya was AfricaÂ’s third-largest producer, pumping 1.6 million barrels per day, but production has since fallen to virtually zero because of infrastructure damage and international sanctions.
Mayouf declined to comment on the extent of damage to oil fields.
Oil traders said they thought it was considerable and were not expecting a resumption of exports from the North African country in the near future. A Reuters poll of analysts and industry officials on Friday showed they expected Libyan oil production to bounce back to 1 million barrels per day in a matter of months if leader Muammar Qaddafi steps down. But it will struggle to return to pre-war output in the foreseeable future, they said.
That means spare production capacity for Saudi Arabia and other major oil producers “will get eroded very quickly,” Barclays analyst Helima Croft said.
“In that event, the pressure on prices will be substantial” as supplies tighten.
Oil prices rose nearly two percent Friday as analysts and investors again focused on the prospect of tighter supplies.
Benchmark West Texas Intermediate crude for August delivery rose $1.60 to $97.29 per barrel in afternoon trading on the New York Mercantile Exchange. Brent crude gained $1.14 at $117.40 per barrel on the ICE Futures exchange.
Despite sluggish economic growth in the US and Europe, experts say that oil demand from China and other emerging nations will drive global oil consumption for years to come.
Oil had its ups and downs this week, ranging from about $94 a barrel to nearly $100. Some of the volatility was caused by Fed Reserve Chairman Ben BernankeÂ’s comments about the possibility of another round of stimulus spending. But no matter what the Fed does, analysts say, it wonÂ’t solve the expected supply issues that have been boosting oil futures this year.