Brent crude jumps to new high above US$70

Business | 8 Apr 2019 6:55 pm

Oil climbed to a four-month high above US$70 a barrel in London as a Libyan commander advanced on the OPEC nation’s capital, spurring fears of supply disruption in the global market, Bloomberg reports.

Brent futures added  0.7 percent. Libya’s internationally-recognized government vowed to counterattack against forces loyal to strongman Khalifa Haftar which are trying to enter the capital Tripoli. Saudi Arabian Energy Minister Khalid Al-Falih also said in a Bloomberg TV interview that the Organization of Petroleum Exporting Countries, which is cutting output, remains focused on bringing down inventories.

Crude prices have continued to climb after their strongest quarter in almost a decade as OPEC and its allies curb output while economic and political crises squeeze supplies from member nations Venezuela and Iran. An escalation of the conflict in Libya, which pumped 1.1 million barrels of crude a day last month, risks creating a supply shortfall.

“In the event of renewed production outages in Libya, the oil market risks sliding into an even larger supply deficit in the second quarter,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. Brent for June settlement advanced by 0.7 percent to US$70.83 a barrel on the London-based ICE Futures Europe exchange, the highest since November 12.

The contract added 1.4 percent to US$70.34 on Friday, taking its weekly gain to 2.9 percent. The global benchmark crude was at a premium of US$7.20 to WTI for the same month. West Texas Intermediate for May delivery added 25 cents, or 0.4 percent, to US$63.33 a barrel on the New York Mercantile Exchange as of 10:56 a.m. in London. Prices climbed by 1.6 percent to settle at US$63.08 on Friday, the highest closing level since November 5.

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