Oil rises to $60 a barrel over Libya concerns

Brent crude oil rose to about $60 (€49) per barrel yesterday, supported by concerns about disruption to output from Libya. But a global supply glut kept prices nearly 50 per cent off their peak for the year.

Libya is producing a scant 128,000 barrels of oil a day from fields connected to the far eastern port of Hariga, an oil official said, as fighting kept its largest ports, Es Sider and Ras Lanuf, shut.

The Opec member nation has struggled with port blockades and protests, slashing output from the 1.6 million barrels a day it produced prior to the 2011 ousting of leader Muammar Gadafy.

A fire sparked by a rocket attack last week on storage tanks at the port of Es Sider marked an escalation in damage to the country’s oil infrastructure.

"There's tension in Libya but liquidity is very thin, so not much is needed to move oil prices," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.

He added that the overall picture remained bearish, with traders looking for reasons to sell. “It’s very supply-driven. On the demand side, the only impact is when you see a negative change in data.”

Trade was sparse, with many investors away for the holidays.

Brent crude was up 51 cents at $59.96 by late afternoon after hitting $60.43. The benchmark shed 79 cents in the previous session.

Brent is down about 46 per cent since a year high above $115 per barrel, hit in June. It has been weighed down by an Opec decision in November not to cut supply to address the slump in prices, as well as comments since from Saudi Arabia signalling comfort with lower prices.

Oil is on track for its biggest fall since 2008 and the second biggest annual fall since futures started trading in the 1980s.

– (Reuters)