Libya confirms restart of its largest oil field

Crude oil prices, which have been drifting deeper into negative territory for several straight sessions, faced further headwinds in early Thursday trading after reports surfaced that Libya was on the rebound. Referencing "a person with direct knowledge of the matter," Bloomberg News reported Libya's largest oil field, Sharara, had re-opened.

Libya's National Oil Corp. confirmed the restart with an announcement late Thursday that it was considering an understanding reached between regional leaders and security groups to keep the field open unconditionally, "restoring over 200,000 barrels per day of Libyan oil production with immediate effect."

NOC Chairman Mustafa Sanalla said the coordination was meant as a lasting solution and force majeure, a contractual condition related to circumstances beyond the control of the parties involved, was now lifted.

The Sharara oil field has operated in fits and starts as Libya tries to push the momentum on the national security front toward the side of peace. It was closed once in April already after restarting just weeks before that.

Libya is exempt from a production ceiling established by the Organization of Petroleum Exporting Countries and the NOC said its output could increase by 100,000 bpd by the end of April to 800,000 bpd. The company set a goal of reaching 1.1 million barrels per day, a level consistent with pre-conflict output by next August.

Secondary sources reported to OPEC economists that first quarter production for Libya was around 660,000 bpd, against 574,660 during the fourth quarter.