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A Libyan Economic Analyst: 90% of CBL’s general reserve will be spent

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In a statement to Libya Al Ahrar TV, the economic analyst Mohsen Dreeja confirmed that the Central Bank of Libya is highly cautious about using its reserves. Hence, the bank’s revenue does not exceed 2% as it does not invest in high-risk goods.

However, the bank’s revenue is limited only to using bonds as a stock means. Yet, bonds yields during the last years are very low.

“The Libyan law stipulates that the spending of the reserves is limited to 20%”,Mohsen Dreeja stressed, adding that “this year, 90% of Libya’s central bank’s public reserve will be spent.”

When Jadhran shut oil ports, the Central Bank of Libya spent 90% of its reserves because it had no other income.

Misrata Free Zone Port: shipping operations are uninterrupted

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Misrata Free Zone Port Administration confirmed that all shipping operations at the port are uninterrupted by the tightening of restriction measures due to the risk COVID-19, adding that that they were confident that all shipping agents and investors could continue their trade without any delays or restrictions.

It should be reminded that the Minister for Transport excluded the closure of air cargo and sea ports for the transport of freight and fuel.

No Coronavirus cases among Libyan nationals

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The Libyan Foreign Ministry announced that overseas diplomatic missions had registered no Coronavirus cases among Libyan nationals.

Yesterday, the Deputy Foreign Minister for Technical Issues Mahmoud Al Tellisi said that the announcement after directly contacting heads of missions and the overseas committees concerned with the matter.

The Foreign Ministry said that all the missions reported all their measures including the needed medical assistance to those in need.

It should be noted that Libya’s Foreign Ministry formed a follow-up committee headed by Al Tellisi and Deputy Foreign Minister for Financial and Administrative Affairs, Hamza Al-Oukli in order to confront any possible outbreak of Coronavirus in Libya.

Nevertheless, to help prevent the outbreak of Coronavirus in the country, Al Serraj stated that the government allocated 500 million dinars and pointed out that borders would be closed for three weeks starting March 16.

He also said that the Foreign Ministry will instruct embassies across the world to contact with Libyans and provide assistance as well as medical treatment if needed.

Dollar soaks up gains

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The dollar stood tall today, recouping losses against the yen and hitting new highs against riskier currencies, as nervous traders stuck with the most liquid currency amid very fragile sentiment.

Market liquidity was tight and investors remained nervous after coordinated moves by central banks had spectacularly failed to quell trepidation over the coronavirus pandemic.

“The dollar can hold onto its gains as markets understandably remain very fragile, but when the dust settles, we think the dollar will end up a little lower,” ING analysts said, while adding that the best level for the dollar index would be between 99 and 100.

The U.S. dollar index rose 0.3% to 98.444, close to its recent high of 98.817.

The dollar rose 0.8% to 106.69 yen and gained on the euro, pound, as well as the Australian and New Zealand counterparts and most emerging markets’ currencies.

The euro dropped 0.5% to $1.1130 while sterling sank to its weakest since September, down as much as 0.6% at $1.2192

Sterling dropped to its lowest level against the U.S. dollar since early September, as Britain toughened its approach to containing the coronavirus outbreak.

The pound fell as much as 0.6% to $1.2192. Against the euro it edged up 0.2% to 91.06 pence per euro, but was still trading near the previous day’s six-month low of 89.89 pence.

Libya: Oil Losses surpass $3 Bn

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Yesterday, the National Oil Corporation published an official notice that summarises the situation across Libya for the oil and gas sector.

NOC expressed its deep concern about a likely fuel shortage in the near future after the forced reduction of local production, the Zawiya refinery shut down and the lack of government funding to import sufficient fuel to serve the basic needs of Libyans. “All this is a result of the illegal blockade of oil facilities”, NOC stated.

It also called on those responsible for the closure to immediately lift the imposed blockade and spare oil sector workers and citizens from more suffering.

“We call on the rest of the state’s bodies to maintain the remaining financial reserves and reduce their expenses as well.” NOC said.

Oil and gas production in Libya have been consistently down. The current levels of production are 91,108 barrels a day, as of Sunday March 15, 2020. Forced restriction of production has resulted in financial losses exceeding 3,276,183,429 USD since January 17, 2020.

Quoting NOC, Tripoli storage depots and some of the surrounding areas and Southern regions are suffering from a lack of supplies due to the deteriorating security conditions. The city of Tripoli is supplied with hydrocarbons directly from the Tripoli port.

NOC denounces illegal fuel imports to Eastern region of Libya

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Libya’s National Oil Corporation stated that in the last few days there has been an illegal shipment of aviation fuel into Libya. NOC has informed the UN, GNA and numerous other governments of these clear violations to UN resolutions and Libyan laws.

NOC added that this shipment of fuel into Benghazi port is a breach of the UN arms embargo relating to Libya, a contravention of the internationally agreed exclusivity of NOC relating to fuel imports, an infraction of the vessel quarantine protocol, and contrary to international law.

The shipment came from the UAE to Benghazi on a ship called Gulf Petroleum 4 and has been in Benghazi port for a number of days.

In September 2019 the UAE signed an international statement saying: We fully support Libya’s National Oil Corporation (NOC) as the country’s sole independent, legitimate and nonpartisan oil company. Now is the time to consolidate national economic institutions rather than break them apart. For the sake of Libya’s political and economic stability, and the well-being of all its citizens, we exclusively support the NOC and its crucial role on behalf of all Libyans.

The actions of the UAE appear to be in stark contradiction to its words.

“Despite extreme hardships caused by illegal blockades on Libya’s oil facilities, NOC has been able to supply sufficient fuel to all parts of Libya, including the Eastern regions to meet all civilian needs, including civil aviation. The only reason I can think of for additional fuel to be imported in this illegal and clandestine way is that it is intended for other purposes.” NOC Chairman Sanalla said.

Gold extends fall as investors rush to hoard cash

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Gold prices fell over 1%, extending losses from the previous session’s meltdown, as investors continued to sell assets to keep their money in cash because of heightened concerns over the economic toll of the coronavirus outbreak.

On the other hand, autocatalyst metals platinum and palladium rose more than 5% each in early trade before paring gains. The metals were the worst hit in Monday’s free fall since they are also considered industrial metals.

Spot gold fell 1.1% to $1,496.78 per ounce by 05:40 GMT, having slumped as much as 5.1% on Monday to its lowest since November 2019. U.S. gold futures gained 1.1% to $1,503.20.

“This is just a continuing trend of gold positions being liquidated as equity markets collapse. There is a trend towards holding cash in the market and that’s being reflected in gold,” said Jeffrey Halley, a senior market analyst at OANDA.

Among other precious metals, palladium rose 2.1% to $1,651.26 per ounce, having plummeted as much as 18% in the previous session.

Platinum was steady at $663.09, having posted its biggest one-day percentage decline ever on Monday. Silver fell 1.5% to $12.71, after touching its lowest since 2009 in the last session.

Oil plunge sets off search for tanks, revives dormant Cushing storage trade

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 Rates to store oil at one of the world’s biggest trading hubs are surging, as traders globally scramble to secure space in tanks to cope with slumping demand from the coronavirus outbreak and a flood of supply from the Saudi-Russia price war.

The need for a place to park all that surplus crude is breathing new life into the market at Cushing, Oklahoma, the nation’s hub for trading of billions of dollars of crude a day and the town that bills itself “the pipeline crossroads of the world.”

Analysts estimate the glut could reach more than 1 billion barrels. Some of the excess crude will be absorbed by nations snapping up cheap oil for their strategic reserves, including India and the United States, but that will only mop up some of the supply.

Storage rates in the Caribbean, which have been weak over the past couple of years, have also strengthened over the past week, market sources said.

And oil majors have shown interest in storing oil offshore in tankers, shipping sources said, although most vessels have already been chartered for transporting crude instead as freight rates surge. “They can ask, but ship owners don’t want it,” one shipping source said.

Storage rates at Cushing, doubled over the past month, and were seen as high as about 50 cents per barrel per month by Friday, two traders familiar with the matter said. Storage for about 540,000 barrels at Plains All American’s Cushing tanks for sublease was offered at 50 cents per barrel (cpb) for a term of one year, one source said.

Oil prices jump $1

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Oil rose more than $1 Today as bargain hunters emerged after recent sharp falls due to the coronavirus pandemic and the price war between Saudi Arabia and Russia, but fears of a recession still dragged on the market.

Brent crude LCOc1 was up by 1.8%, or 55 cents, to $30.60 a barrel by 04:10 GMT, after hitting a high of $31.25.

U.S. West Texas Intermediate (WTI) crude CLc1 rose 3.7%, or $1.06, to $29.76, having come off a high of $30.21.

“Presumably, the market is getting supported by physical bargain hunters and short covering,” said Stephen Innes, chief markets strategist at AxiCorp.

The United States claimed it will take advantage of low oil prices to fill its Strategic Petroleum Reserve (SPR), and other countries and companies are planning similar measures to fill storage tanks.

“But those storage facilities are rapidly filling. If storage does fill, quashing that demand, oil prices are sure to collapse further, and the global markets will then have to hope that the dispute between Saudi Arabia and Russia is resolved before we reach that point of no return,” Innes said.

Libya declares a state of emergency

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Libya’s Tripoli-based Government of National Accord has declared a state of emergency over the coronavirus and will close all air and sea ports from Monday, Prime Minister Fayez al-Serraj said on Saturday.

Serraj also said, in a broadcast address, that his internationally recognised government had earmarked 500 million Libyan dinars ($360.54 million)to combat the disease if it reached Libya, though no cases had been confirmed so far.

Libya, split for years between rival governments that have been fighting a war for nearly a year, lacks adequate isolation and other facilities to combat the virus, the head of its disease control centre claimed.