Oil futures: Brent consolidates gains on Libyan outages, holds above $113/b
Brent crude oil futures in Asian trading hours Tuesday were slightly higher, consolidating at monthly highs as markets found support after Libya was forced to shut in its largest oil field, while port demonstrations caused further disruptions.
Front-month June ICE Brent futures were trading at $113.22/barrel (0550 GMT), compared to Monday’s settle of $113.16/b.
At the same time May NYMEX WTI was trading $108.10/b, versus Monday’s settle of $108.21/b, while the more-liquid June contract was trading at $107.49/b.
Market watchers said Libya’s oil exports had tumbled by over half a million barrels a day as a wave of demonstrations hit key facilities, but prices remain prone to sharp swings.
“The key catalyst for the most recent strength is the supply disruptions from Libya. Libya’s largest oil field, the 300 million bpd Sharara field and the 65,000 bpd El Feel field have been shut due to protestors,” said Warren Patterson, head of ING’s commodity research.
Meanwhile, the EU was considering fresh sanctions as Russian forces launched a new offensive push along most of Ukraine’s eastern flank on Monday and the “Battle of Donbas” has now begun, Ukrainian President Volodymyr Zelensky said.
“We can now say that Russian forces have started the battle of the Donbas, for which they have long prepared,” Zelensky said in a video address.
Oil was also underpinned by reports that Shanghai was preparing to ease lockdown restrictions, although the process is expected to be slow.
Gains were pared by the stronger dollar after the index soared to fresh highs of around 101 points Tuesday.
“With so much volatility in intraday oil prices, and extreme reactions to headline risks, technical levels have become rather irrelevant. Overall, therefore, I continue to expect that Brent will remain in a choppy $100/b to $120/b range,” said Jeff Halley, senior market analyst at Oanda.
Published: 19-04-2022
