Mediaboss Marketing

By Dave Forest - Aug 08, 2017, 10:30 AM CDT

More drama in embattled oil producer Libya this week. With reports suggesting the countrys largest oil field has once again been endangered by local fighting.

Reuters reported early Monday that production at the Sharara field was grinding to a halt. With local sources saying that a key control room at the facility had been shut down.

The reason for the closure wasnt immediately clear. But Reuters did cite persons familiar with the situation as saying that an armed group had taken action against the facility potentially resulting in the shutdown.

At the time, sources said that Shararas output was likely to decline to zero due to the problems at the control room. But reports emergedlater in the daysaying the problem had been fixed, and that production was now returning to normal.

Those reports confirmed that an armed group had been involved in action against the infrastructure here. With Libyas National Oil Company saying, The armed protesters were evacuated from the control room, pumping returned to its natural level and production is being restored.

All of whichis potentially critical news for the global crude market. With Sharara being the biggest part of Libyas recently-surging oil production putting out 270,000 barrels per day of Libyas total 1 million b/d output. Related:Barclays: Oil Prices To Drop This Quarter

It looks as if problems here have been averted for the time being. But these events show things are still tenuous in Libyas oil sector evidenced by the fact an armed group was able to take over one of the countrys key installations, even briefly.

If ongoing problems do present here, it could put a significant dent in crude supplies giving support to the oil price. Watch for reports on any new issues over the coming weeks and months.

Heres to a smooth return.

By Dave Forest

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Oil Prices Fall As Libya's Biggest Oil Field Comes Back Online - OilPrice.com