LONDON: Oil rose above $107 a barrel yesterday after five straight declines supported by doubts about a recovery in Libyan output, fighting in Iraq and as cold weather across the central United States threatened production.
Brent crude had gained 59 cents to $107.32 by 1146 GMT, after settling lower in the previous five sessions, partly on expectations of rising Libyan exports. US crude was 50 cents higher at $93.93.
Brent hit its lowest since November 20 on Monday, finding support just above that day’s low of $106.51. Analysts said the field’s return was unlikely to push prices much lower.
“I think the restart of production is priced in by now. Maybe it’s even overshot to the downside,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
Violence in Iraq and the possibility of increased tensions ahead of parliamentary elections in April have also sparked concern about supply from the country, the second-largest Middle East oil producer.
US Vice-President Joe Biden spoke with Iraqi Prime Minister Nouri Al Maliki on Monday to express support for Iraq’s fight against al Qaeda-linked militants in Anbar province.
Oil was also supported by severe cold weather in the central United States that threatens to curtail some oil production as wells were stranded and drilling and fracking operations were interrupted.
Still, as of Monday, major US oil producers had only reported minor effects on their operations. Temperatures were forecast to return to normal levels in Texas and North Dakota by today. Reuters