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Crude Up Sharply as Libyan Supply Issues Take Center Stage

Crude Up Sharply as Libyan Supply Issues Take Center Stage
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Τρι, 13 Αυγούστου 2013 - 13:27
Crude-oil futures rose sharply in London trading Tuesday amid uncertainty over Libyan supplies, with benchmark Brent having now regained all the losses of last week.
Crude-oil futures rose sharply in London trading Tuesday amid uncertainty over Libyan supplies, with benchmark Brent having now regained all the losses of last week.

Brent crude for September delivery rose 82 cents, or 0.7% to $109.79 a barrel on ICE Futures Europe. U.S. crude-oil futures were up 89 cents, or 0.8%, at $107.00 a barrel on the New York Mercantile Exchange.

Brent has gained more than $3 a barrel this week. The North American benchmark, meanwhile, is pushing toward a one-week high.

Traders took a pessimistic stance about the outlook for Libyan production, where strike action has closed export terminals and crimped production.

Terminals are reported to be reopening and then to be closing again, with statements from ministers and labor unions only adding layers of confusion to what brokerage PVM described as a shambolic situation.

The North African nation's production capacity is 1.6 million barrels a day, and its two key ports Es Sider and Ras Lanuf have a combined daily export capacity of 600,000 barrels.

This much crude being out of circulation is keeping a floor under Brent crude prices, says VTB Capital analyst Andrey Kryuchenkov. Short-term fundamentals continue to limit the downside ahead of the front-month Brent contract expiry on Thursday, he said in a note to clients.

Traders will look to U.S. July retail sales, due later Tuesday, for indications as to how and when the Federal Reserve will begin tapering its bond-buying program. This process has supported prices for oil and other commodities in the past few years as it keeps a lid on the value of the U.S. dollar, the global currency for trade in oil, and the resulting low interest rates means investors chase returns elsewhere.

Recently the ICE's gasoil contract for September delivery was up $13.75 at $928.00 a metric ton, while Nymex gasoline for September delivery was up 189 points at $2.9230 cents a gallon.

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