Crude rose as Libya halted the pipeline from its biggest field, tempering concerns about the global supply glut as U.S. stockpiles expand.
West Texas Intermediate futures rose as much as 1.4 percent. Libya’s output has dropped to 560,000 barrels a day following the shutdown of the pipe from the Sharara field, according to a person with knowledge of the matter. U.S. crude inventories probably rose by 1.38 million barrels last week from a record high, a Bloomberg survey showed. Gasoline supplies dropped a sixth week, according to the survey.
If industry data due Tuesday and a government report on Wednesday show U.S. supplies are still rising, it would be further evidence that increased American output is blunting the effect of production curbs by OPEC and its allies. Five OPEC countries joined with non-member Oman on the weekend to voice support for prolonging their deal to cut output past June. Output in Libya, exempt from the cuts, had climbed back to 700,000 barrels a day before the pipeline halt.
“The Libyan production cuts are getting most of the attention today,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone. “We’re also getting support from gasoline. As gasoline goes, so goes crude to a certain extent.”
WTI for May delivery advanced 45 cents, or 0.9 percent, to $48.18 a barrel at 9:29 a.m. on the New York Mercantile Exchange. Total volume traded was about 31 percent below the 100-day average. Prices declined 24 cents to $47.73 on Monday.
Brent for May settlement climbed 48 cents, or 1 percent, to $51.23 a barrel on the London-based ICE Futures Europe exchange, and traded at a $3.10 premium to WTI.
Libya Unstable
The Libyan outage is “a substantial loss of output, but the important question for the market will be whether this turns into a lengthy disruption or not,” said Richard Mallinson, an analyst at London-based consultants Energy Aspects Ltd. “The political and security situation remains deeply unstable.”
U.S. crude inventories rose to 533.1 million barrels through the week ended March 17, according to the Energy Information Administration. Stockpiles are at the highest level in weekly data compiled by the agency since 1982. The industry-funded American Petroleum Institute is due to release its latest supply data on Tuesday.
April gasoline futures climbed 1.6 percent to $1.6446 a gallon on the Nymex.
Oil-market news:
U.S. oil output will approach the highest level since 1970 by December, according to a report from Barclays Plc. Abu Dhabi National Oil Co. will reduce volumes of Murban and Das crude in May by 7 percent in order to meet the U.A.E.’s commitment to OPEC, Adnoc said in a statement. The five-nation joint technical committee that’s assessing compliance with the OPEC-led supply cuts will meet again on April 21, according to an OPEC delegate. BP Plc Deputy Chief Executive Officer Lamar McKay said Monday that the oil market may rebalance later this year.
Recommended for you
