Oil Prices Advance Despite Return of Libya Crude
Oil prices advance on Tuesday despite the return of Libya supply into the market. There have been noticeable supply concerns due to tight supply from producers of the Organization of Petroleum Exporting Countries and allies (OPEC+).
Also driving the rally in the crude oil market is the fact that many countries are yet to impose fresh restrictions to curb the spread of the COVID-19 omicron variant in recent times.
Today, crude oil traded higher following two losing sessions despite concerns over the wildfire spread of the Covid-19 omicron variant and the return of supply from Libya.
Market data shows that West Texas Intermediate crude for February delivery was last seen up US$1.00 to US$79.23 per barrel, while March Brent crude, the global benchmark, was up US$0.94 to US$81.81.
The rise came even as supply from Libya began to normalize after a militia group agreed to resume output at the country’s largest oilfield while pipeline repairs were completed.
However, the weather has shut some of the country’s largest export terminals, preventing some oil from reaching international markets.
“Oil exports from the country’s western oil ports are also likely to begin again soon. That said, oil exports from most of Libya’s other oil ports have been suspended due to bad weather this week, meaning that the higher oil production in the country has not yet translated directly into an increase in available oil supply.
“This may explain why oil prices have not responded as yet to the reopening of the Libyan oilfields,” Commerzbank analyst Carsten Fritsch said in a note.
Tuesday’s rise comes despite the rapid spread of the omicron variant, with the World Health Organization warning that 50% of Europeans could be infected with Covid-19 over the next two months.
However many are convinced the variant results in more mild cases that are less likely to cut demand, even as China increases lockdown measures to lower cases ahead of next month’s Winter Olympics and new U.S. cases rose to a record.
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