U.S. oil futures prices held at five-month highs in firmer Tuesday action, as investors were cautious for potential supply outages tied to civil unrest in Libya.
“Brent stumbled at $70, but not for long, while WTI is now running into resistance around $65,” said Craig Erlam, senior market analyst at Oanda. “Dollar weakness may be contributing to the surge, while the potential for supply disruptions in Libya may also add to the bullish case.”
U.S. benchmark West Texas Intermediate crude for May delivery
on the New York Mercantile Exchange was up 6 cents, or 0.1%, at $64.46 a barrel. The contract gained for a sixth straight session and marked the highest finish since Oct. 31 on Monday, according to Dow Jones Market Data. The contract rose 4.9% for last week.
was down 10 cents, or 0.1%, at $71 a barrel and has spent time both higher and lower. The settlement at $71.10 Monday was the highest for a front-month contract since Nov. 7.
A major oil port in Libya, which is a member of OPEC, is expected to be shuttered as a result of fresh civil unrest in the country. The U.S. military has pulled a small contingent of American forces from Libya as the country teetered on the brink of full-scale civil war, with fighting continuing around the capital Tripoli.
“If this port were to be shut down due to the fighting, this could see a delivery outage of up to 300,000 barrels per day,” analysts at Commerzbank wrote in a note Tuesday. “The oil market is already undersupplied, so if supply from Libya also falls away the supply deficit will become even bigger,” they added.
The situation, combined with ongoing production cuts from the Organization of the Petroleum Exporting Countries and Russia and U.S. sanctions on Venezuela and Iran, all point to lower supplies. The Trump administration on Monday was preparing to designate Iran’s Islamic Revolutionary Guard Corps as a foreign terrorist organization, The Wall Street Journal reported, citing U.S. officials.
In other energy trade, May gasoline
rose 0.5% at $1.9979 a gallon, trading at its highest since October as well. May heating oil
ended 0.02% higher, at $2.0575 a gallon.
May natural gas
fell 0.2% to $2.703 per million British thermal units.
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