Libya's interim prime minister said closed oilfields and ports in the Opec member state may soon reopen, despite his leadership rival’s energy minister claiming that negotiations with protesters were proving difficult.
Fathi Bashagha, who is backed by the country's parliament, said on Tuesday that efforts to reopen oil refineries were “crowned with success”, and that a militia in the east of the country had agreed to “lift its siege” on oilfields.
Libya’s crude production was halved to 600,000 barrels a day over the past month after protesters demanding the resignation of the incumbent, Abdul Hamid Dbeibah, forced the closure of oilfields such as Al Sharara, the nation’s biggest.
The country's parliament, based in eastern Libya, confirmed former interior minister Mr Bashagha as interim prime minister in March this year.
However, Mr Dbeibah refused to relinquish power except to an elected government and rejected the parliamentary vote, leaving the country with two competing governments.
Mr Dbeibah was appointed through a UN-led process in March last year on the condition that he leads the North African country until elections.
Mohamed Oun, Mr Dbeibah’s oil minister, said talks with protesters were continuing.
“We are facing some difficulties in reaching an agreement with protesters to reopen the [oilfield],” Mr Oun told Bloomberg on Tuesday, hours before Mr Bashagha’s Twitter statement.
Libya is losing between $50 million and $60m a day from the closures, he said.
The country produces about 1.2 million barrels of oil a day and is exempt from the Opec+ production deal because of security concerns.
Libya’s National Oil Corporation, which controls operations at oilfields, has not said when production or exports will return to normal.
The shutdowns are the latest in a series of disruptions to hit Libya’s energy sector amid the worsening political crisis.
They come at a delicate time for global commodity markets, with oil having surged above $100 a barrel after Russia’s invasion of Ukraine.
Libya's rival administrations could herald a return to division and instability, the UN warned earlier this year.
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
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How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
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