Glencore buys Libyan oil as flows recover

LONDON Mon Oct 10, 2011 6:16pm BST

A worker uses a mobile lift to clean the windows of the headquarters of Swiss commodities trader Glencore in Baar near Zurich April 13, 2011. REUTERS/Arnd Wiegmann

A worker uses a mobile lift to clean the windows of the headquarters of Swiss commodities trader Glencore in Baar near Zurich April 13, 2011.

Credit: Reuters/Arnd Wiegmann

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LONDON (Reuters) - Commodities trader Glencore (GLEN.L) is planning to lift its first cargo of Libyan crude oil since production resumed there, trade sources said on Monday, in a further sign of recovery despite continued fighting.

Competition to buy the oil, absent from the spot market for months, has heated up following the easing of sanctions against Libya's National Oil Corporation in mid-September.

Trading firm Vitol and U.S. major ConocoPhillips (COP.N) have been among the early buyers of Libya's light, sweet Sarir grade crude sourced from eastern fields.

Glencore's 600,000 barrel tanker, the NS Creation, was due to arrive in Tobruk on October 11 for loading, according to live ship tracking data AIS.

Its load is worth a nominal $65 million based on current Brent oil prices near $109 a barrel.

The tanker's destination port was not immediately known but trade sources said that it was set to be exported.

A Glencore spokesman declined to give an official comment.

Industry sources told Reuters in September that the commodities giant signed a fuels deal with the transitional government (NTC), as traders began vying for contracts with the country's new leaders.

OIL FLOWS

So far, four cargoes carrying around 2.5 million barrels have been exported from Libya since oil production began in early September, according to Reuters calculations.

While this is still just a fraction of pre-war export levels, Libya's economic lifeline is recovering faster than some analysts expected even though pockets of territory are still held by Gaddafi loyalists.

The head of the International Energy Agency said on Monday that Libya may be able to return to its pre-war level oil output earlier than 2013 if oil companies resume activities there as quickly as they seem to be doing.

Trade and shipping sources said that another two tankers were planned to load from Tobruk in October, with at least one of these being offered by Libyan oil firm Agoco via tender.

So far only Mellitah and Sarir grade crude oil and condensate has been available for export, traders said.

(Reporting by Emma Farge and Eric Onstad; Additional reporting by Jonathan Saul)

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