Brent crude futures rose by 2.7%, reaching the price of $67.02 a barrel, and marking a two-and-a-half year high. This came shortly after news of the bombing of an oil pipeline in Libya which belonged to the oil company Waha, near the Mediterranean port of Es Sider.
A source in Libya’s oil sector declared that the country lost about 90 thousand barrels per day of crude oil from the pipeline explosion, which may affect the supply. The pipeline is operated by the Waha Oil Company, a unit of the Libyan National Oil Corporation and a joint venture with Hess Corp., Marathon Oil Corp. and ConocoPhillips.
The Brent crude rose more than 17% in 2017, supported by the Organization of the Petroleum Exporting Countries (OPEC), Russia and other countries since January, to reduce the global supply production. Oil market analysts believe that the rise in Brent crude to $65 per barrel could stimulate the popularity shale oil in the United States, which is expected to add a new wave of supply.
In the oil markets context, the Royal Dutch Shell International Energy confirmed that the attraction of international investments in various fields of the energy industry is currently an ongoing competition, noting that in particular, the crude oil sector is finally starting to recover its attractiveness to investors, after the struggling in recent years. Until not long ago, oil prices were very weak, and this downtrend lasted more than expected, causing great difficulties for the industry.
As global changes in the energy industry are nowadays inevitable, with new energy sources starting to come out, the oil and gas sectors are facing new challenges. The dependence on renewable energy in the electricity production is increasing, while some people believe that renewable energy will not be able to meet needs and will continue to represent less than 20% of the world’s energy mix.
Shell declared that the demand for energy will increase and demand for petrochemicals is also growing, at a time when energy is supposed to shift to a low-carbon future, indicating that it will take a long time, even decades. The report stated that the world still needs large quantities of oil and gas, which has shifted the focus to reducing costs and stimulating investments, while adding more innovation in the near future. OPEC will continue to be the biggest supplier of crude oil and will continue to serve customers with higher quality of services. At the current stage, the focus should be on developing innovation faster and learning from past mistakes, when the market was left without leadership and without important initiatives such as the last production reduction agreement.
Traditional oil producers face fierce competition with US production, but are working through a strong new strategy that focuses on a better future for the industry by boosting investments, reducing the supply-demand gap, treating surplus stocks and boosting price recovery.