Libya's Biggest Oil Field Oil Halts Production Amid Opec Supply Concerns

Libya's biggest oil field has halted production as a precaution after a rocket attack on a connected refinery, adding to a slowdown in Opec output.

Libya stopped pumping at the Shahara oilfield on September 16, shutting down around 30% of national output.

A rocket exploded near a crude storage tank at the Zawiya plant on September 15 and Sharara was completely shut down the following evening after the discovery of damage to a 300,000-barrel crude storage tank at the refinery complex.

Once security improves Zawiya will reopen, followed by Sharara after safety checks are completed, according to reports by local media.

Saudi Arabia announced a significant supply reduction in August, cutting 408,000 barrels a day in an attempt to sustain oil prices.

Brent Crude fell below $100 per barrel in September, their lowest level for more than a year.

Despite geopolitical tension in some of the world's biggest oil production centres such as Russia, Iraq and Iran, economists have predicted a further drop in the price of oil over the coming year.

Meanwhile, Nigeria's National Petroleum Corp has started talks in a bid to prevent a strike that could disrupt exports in Africa's biggest oil producer.

"Libya, Nigeria show us to be cautious," Miswin Mahesh, an analyst at Barclays Plc, told Bloomberg. "The Saudi cuts in August helped to balance the market slightly. We're not out of the woods yet, but it is certainly a beginning."

Libyan production had only recently recovered after armed separatists handed over control of oil export terminals in the country's east to the central government in July.

Production was recorded at 870,000 barrels on September 14, but the stoppage at the Sahara plant trimmed around 250,000 barrels from Libya's overall output.