Oil soared on Saudi optimism and Libyan outage

• Oil soared on reports of Libyan outage.
• Oil is also being helped by a weak USD and Saudi optimism.

Crude oil/WTI is now trading around 64.00, in the New York session, up by 0.70% on Saudi optimism. There were also some reports of a dip in Libyan production along with reports of a slowdown in exports from Libya’s Mellitah oil terminal earlier on the weekend.

Libya's National Oil Corp said on Saturday that it had declared force majeure on the 70,000 bpd El Feel oilfield after a protest by guards closed the field over salary issues. The protests at the El Feel field in Libya have led to the introduction of a force majeure at the 90,000-bpd field, affecting exports from Mellitah. The National Oil Corporation said in a statement that loadings at Mellitah will be “modified” in accordance with events at El Feel.

Crude oil prices were also boosted by comments from Saudi Arabia Energy Minister over the weekend, who said that he expects production cuts to ease next year (Current OPEC/ Non-OPEC production cut due to expire at year-end). He also said that the global oil market is rebalancing and the decline in oil inventories is expected to continue this year.

Also, the extreme cold weather is supporting the demand for heating oil as well as the crude oil right now along with a weaker USD. On Friday, oil was almost unchanged after Baker Hughes rigs data came as 799 against 798 earlier.

Technically, Oil has now to sustain gains above the 63.75-64.15 area for a further rally toward the 64.85-66.05 zone in the coming days; else sustaining below 63.00-62.70, it may again fall to  the 61.30-58.00 area in the coming days.