11 April 2017 12:01 am
REUTERS: Oil rose further above US $ 55 a barrel yesterday, supported by another shutdown at Libya’s largest oilfield and heightened tension over Syria following the US missile strike.
Libya’s Sharara oilfield was shut on Sunday after a group blocked a pipeline linking it to an oil terminal, a Libyan oil source said. The field had only just returned to production, after a week-long stoppage ending in early April.
“High, unscheduled production outages are still giving (oil prices) a boost,” said Carsten Fritsch of Commerzbank.
Brent crude, the international benchmark, rose 42 cents to US $ 55.66 at 0840 GMT. US crude was up 33 cents at US $ 52.57. Oil also climbed on heightened tension in the Middle East, a region that is home to more than a quarter of the world’s oil output. Crude rallied last week after the United States fired missiles at a Syrian government air base. Libya’s Sharara field was previously shut for a week until April 2. The OPEC state has been pumping a fraction of potential output because of conflict and unrest since the 2011 civil war. Oil prices have also been supported by a deal led by the Organisation of the Petroleum Exporting Countries to cut output by 1.8 million barrels per day for the first six months of 2017. Libya, and another OPEC member Nigeria, are exempt from cuts.
Last week’s rise in prices was due to “the relatively high OPEC adherence to the supply cut agreement and the general belief that the deal will be extended and, secondly, because of geopolitical developments,” Tamas Varga of oil broker PVM said. However, the price rally has been limited, as oil price gains have encouraged production in other countries such as the United States, filling some of the gap left by OPEC-led cuts. US drillers added oil rigs for a 12th straight week, energy services firm Baker Hughes said on Friday, as energy companies boost spending on new production.