Oil rises as Libya outages add to supply fears
NEW YORK: Oil rose on Monday in choppy trade, with Brent crude topping $113 a barrel, as outages in Libya deepened concern over tight global supply amid the Ukraine crisis, offsetting worries over slowing Chinese demand.
Adding to supply pressures from sanctions on Russia, Libya’s National Oil Corp on Monday warned “a painful wave of closures” had begun hitting its facilities and declared force majeure at Al-Sharara oilfield and other sites.
“With global supplies now so tight, even the most minor disruption is likely to have an outsized impact on prices,” said Jeffrey Halley, analyst at brokerage OANDA.
Brent crude, the global benchmark, rose $1.24 to $112.94 a barrel by 11.19am EDT (1519 GMT). Earlier in the session, the contract rose to $113.80 a barrel, its highest since March 30.
US West Texas Intermediate rose 85 cents to $107.80 a barrel. The benchmark hit $108.65 a barrel, also the highest since March 30.
But putting a lid on prices was concern about energy demand in China, whose economy slowed in March, taking the shine off first-quarter growth numbers and worsening an outlook already weakened by Covid-19 curbs.
Data on Monday also showed China refined 2 per cent less oil in March than a year earlier, with throughput falling to the lowest since October as the surge in crude prices squeezed margins and tight lockdowns hurt demand.
Oil surged to the highest since 2008 in March, with Brent briefly topping $134. “There’s still some confusion about whether they’re reopening their economy, so were getting mixed signals out of China and that has presented a lot of volatility this morning,” Price Futures Group analyst Phil Flynn said.
Published in Dawn, April 19th, 2022
