Libya force majeure pushes oil price to $68

Oil rose to $68 a barrel and hit its highest in a month on Tuesday, supported by disruption to Libyan exports and expectations of a drop in U.S. crude inventories, though rising coronavirus cases in Asia limited gains, Reuters reports.

Libya declared force majeure on exports from the port of Hariga and said it could extend the measure to other facilities, citing a budget dispute. Hariga is scheduled to load about 180,000 barrels per day (bpd) in April.

According to the wire news service, Brent crude was up 64 cents, or 1%, at $67.69 a barrel by 1004 GMT after hitting its highest since March 18 at $68.08. U.S. West Texas Intermediate (WTI) crude gained 60 cents, or 1%, to $63.98.

“Follow-through buying is pushing prices up further,” said Tamas Varga at oil broker PVM. “But the immediate upside potential could be limited by the relentless march higher in infection rates.”

Worldwide coronavirus cases have exceeded 141.7 million and a surge in infections in India, the world’s third-biggest oil importer, has dampened optimism for a sustained demand recovery.

Elsewhere in Asia, the Philippines has is experiencing a second wave of infections. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 for two weeks.

Oil was underpinned by a weak U.S. dollar, which makes oil cheaper for buyers using other currencies.

“U.S. dollar weakness continues to offer support to the commodities complex,” ING Economics said in a report.

Brent has recovered from historic lows hit last year, helped by some demand recovery and huge output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+.

In focus later will be the American Petroleum Institute’s report on U.S. supplies, due at 2030 GMT. U.S. crude stockpiles are expected to drop by 2.9 million barrels.

UNI Agric Markurdi
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