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Tokyo - Oil rose after its steepest weekly loss in a month as Libya was said to halt production briefly at its biggest field.
Futures in New York climbed as much as 1.2% after a 3.6% decline last week. Production was said to have stopped at the Sharara field Sunday after a pipeline to the Zawiya refinery closed. Sharara has now begun pumping again, according to a person with knowledge of the matter. The halt came shortly after protests disrupted output at another Libyan deposit in February.
Libyan production had been surging in recent months, becoming a thorn for the market on concern that further growth could test the country’s pledge to OPEC to help limit a global oversupply. The increase - together with rising US output - has prevented prices from regaining the highs of January even as most OPEC members continue to curb production.
“Oil prices are on the rise this morning as news of supply disruptions in Libya emerged,” said Michael Poulsen, an analyst at Global Risk Management.
West Texas Intermediate for April delivery rose as much as 72 cents to $61.97 a barrel on the New York Mercantile Exchange and traded at $61.68 as of 11:00. Last week’s drop was the first weekly decline in three weeks. Total volume traded Monday was about 7% above the 100-day average.
Brent for May settlement advanced 34c to $64.71 a barrel on the London-based ICE Futures Europe Exchange. Front-month futures slipped 4.4% last week. The global benchmark traded at a $3.24 premium to May WTI.
Libyan oil production remains threatened by the lingering effects of civil strife that erupted earlier in the decade. Though output has risen, it’s still well below the 1.6 million barrels a day pumped before the ouster of former leader Muammar Qaddafi.
While investors focus on Libya, in the US, oil explorers boosted the number of rigs drilling for crude to 800 for the first time in almost three years, according to Baker Hughes data released on Friday.
Drillers have been accelerating exploration in an almost-unbroken streak since early November, vaulting American crude output to a record of more than 10 million barrels a day.
Other oil-market news:
• The US will dominate global oil markets for years to come, satisfying 80% of global demand growth to 2020 as the shale boom keeps OPEC under pressure, the International Energy Agency said on Monday in a report.
• CERAWeek by IHS Markit, the largest gathering of energy executives and officials in the Americas, begins on Monday, when OPEC Secretary-General Mohammad Barkindo will dine with shale executives in Houston.
• Money managers boosted bets on rising WTI crude prices by the most in six weeks during the week ended February 27, according to the US Commodity Futures Trading Commission.
• China National Petroleum Corp.’s crude production may fall about 1% in 2018, General Manager Zhang Jianhua said in Beijing.
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