Search ForexCrunch

Bloomberg is reporting that a military commander seeking to oust Libya’s United Nations-backed government will let the country’s oil industry re-open after an eight-month blockade that’s all but halted exports, according to US diplomats.

Khalifa Haftar gave his “personal commitment” to “allow the full reopening of the energy sector” by Sept. 12, the U.S. embassy in the capital Tripoli said in a statement the same day. He made the pledge in an exchange of letters between his self-styled Libyan National Army and the embassy.

By Sunday afternoon, however, Haftar and the LNA still hadn’t made a public statement about ending their blockade or allowing oil shipments to resume.

A restoration of oil exports could come by next weekend, a person with knowledge of the situation said on Sunday, asking not to be identified because they’re not authorized to speak to media.

Market implications

Libya holds Africa’s largest crude reserves and pumped 1.2 million barrels a day last year.

However, output plummeted to 80,000 barrels a day after Haftar halted operations at fields and ports in his territories in mid-January.

Any increase in production could unnerve the Organization of Petroleum Exporting Countries and its allies. The group, known as OPEC+ and led by Saudi Arabia and Russia, is to hold a virtual meeting on Thursday to decide whether to continue easing the output cuts they agreed on in April at the height of the coronavirus pandemic,

the article states which makes the meeting an important even for WTI traders this week as the price tests the $37 area. 

If the price can hold in here, there are bullish prospects on chats as follows:

  • WTI Price Analysis: Bulls targeting a weekly bullish correction, 1:3 R/R