Libya’s Weekly Oil Stockpiles Tumble Just Before Its Turmoil Worsens

Orbital Detects Decline in Crude Inventories

Against the backdrop of falling global oil supplies, Orbital Insight has detected a substantial drop in crude inventories in Libya, one of OPEC’s top ten producers edging towards heightened internal military conflict.

Libya’s crude stockpiles dropped by 830,000 barrels or 4.2% in the week ending April 1, Orbital’s satellite-based rooftop-monitoring technology for oil tanks found.

For all of March, Orbital picked up a more modest decline of 200,000 barrels in Libya’s crude inventory.

Libyan National Army Chief Escalates Risk of Turmoil

About 40% of the one-million barrels per day of oil production in the African state has fallen under the control of Libyan National Army chief Khalifa Haftar, who’s leading a rebellion against the UN-recognized administration of Tripoli.

The decline in Libyan crude stockpiles during the week to April 1 occurred just before Haftar, who’s aligned to a parallel administration in the country’s eastern city of Benghazi, ordered his troops to march to Tripoli, escalating the risk of turmoil that’s become the face of Libya since the overthrow of Muammar Gaddafi in 2011.

While Saudi-led OPEC has been focused on slashing oil production since the start of the year, Commerzbank noted that if Libyan crude exports were disrupted, it would “noticeably increase the pressure on Saudi Arabia to open up the oil tap again, as it did in the autumn”.

Data Shows Complicated Case for Production Increase

Orbital’s data showed that total inventories of OPEC’s 14 members are at a 24mm barrel YoY surplus, complicating the case for any production increase by the group. Saudi Arabia has repeatedly stated in recent months that despite production cuts of 1.2 million bpd by OPEC and its 10 other allies led by Russia, global oil inventories remained stubbornly high this year. OPEC and its allies will meet in June and are likely to extend their cuts despite oil prices having risen as much as 40% since the year began.

Orbital Insight Energy Libya Storage
Orbital Insight Energy identifies a decline in Libyan oil storage

Orbital’s data showed that OPEC crude stockpiles for the week ended April 1 were up by 630,000 barrels, while those for March rose by 4.1 million barrels.

Increases were found in the inventories of all leading OPEC members from Saudi Arabia to Iraq and even Iran, which was facing U.S. sanctions limiting the export of its oil.

OPEC will release on April 10 its own monthly report on its members’ crude supply-demand situation in March.

Global Impact of Production Cuts on World Stockpiles

On a global front, the group’s production cuts have started impacting world stockpiles of oil, Orbital’s data showed.

Global crude stockpiles fell 8.65 million barrels during the week to April 1, although for March, they remained up 15.23 million and for the year, they rose by 123.23 million.

OECD countries, representing the world’s wealthiest nations, also had a weekly decline, of 4.87 million barrels, versus a monthly build of 19.52 million and annual surplus of 21.41 million.

China, the world’s second largest economy, experienced a weekly build of 150,000 barrels against a monthly decline of 1.05 million and a yearly surplus of 68.12 million.

Countries outside of OPEC and OECD had a weekly drop of 4.42 million barrels and a monthly decline of 8.41 million, versus an annual build of 85.68.

The U.S. storage hub for crude in Cushing, Oklahoma was estimated to have had a 320,000 barrel decline on the week and a virtually flat stockpile situation for March. But compared to a year ago, Cushing stockpiles were still higher by 7.76 million barrels.