U.S. crude oil futures are less than $77 per barrel on Tuesday, after a spike caused by Libya’s blocks in production and export. Although Libya produces 1.2 million barrels per day—most of which are sent to European countries—the market expects a gradual disruption and not an outright stop of production.
The slight pullback experienced in U.S. oil prices is believed to be because investors expect that the disruption will be controlled by authorities.
Goldman Sachs thinks it will be temporary, with 600,000 barrels falling off-market in September and 200,000 in October.
The pause in production is a result of a disagreement over leadership between Libya’s rival governments based in Tripoli and Benghazi for the central bank.
Since they control the production infrastructure, the eastern regional government can easily close down production activities
Goldman Sachs changed its Brent price forecast downward by $5, expecting an average price of $77 in 2025, due to demand in China and unexpected efficiency gains in US supply.
