Oil prices surge on supply fears after oil field shutdown in Libya
NEW YORK — Oil prices climbed on Wednesday, settling up about 3% after a disruption at Libya’s top oil field added to fears that mounting tensions in the Middle East could disrupt global oil supplies.
Brent futures rose $2.36 or 3.1% to settle at $78.25 a barrel. US West Texas Intermediate (WTI) crude rose $2.32 or 3.3% to settle at $72.70.
Both crude benchmarks settled higher for the for the first time in five days with the biggest daily percentage gain for WTI since mid-November.
“Oil is trading... higher today, buoyed it would appear by protests at Libya’s largest oil field and further attacks in the Red Sea,” said Craig Erlam, senior market analyst UK & EMEA, at data and analytics firm OANDA.
In OPEC member Libya, protests forced a shutdown of production at the 300,000-barrelper-day Sharara oil field.
Oil prices also climbed after Israel intensified its bombing of the
Gaza Strip after its war with the Iran-backed Palestinian Hamas group stretched into Lebanon with the killing in Beirut of Hamas’ deputy leader. Israel has neither confirmed nor denied responsibility.
The head of Lebanon’s armed group Hezbollah, also backed by Iran, warned the killing of Hamas’ deputy chief was “a major, dangerous crime about which we cannot be silent.”
In the Red Sea, another Iranbacked group, the Houthis in Yemen, continued to attack vessels, prompting concerns that a wider Middle East conflict could develop and close crucial oil transport waterways like the Red Sea and Persian Gulf. In OPEC member Iran, two explosions killed more than 100 people and wounded scores at a ceremony to commemorate top commander Qassem Soleimani who was killed by a US drone in 2020.
The Organization of the Petroleum Exporting Countries (OPEC) said cooperation and dialogue within the wider OPEC+ oil producer alliance will continue after Angola last month announced it would leave the group.
OPEC+, which includes OPEC and allies like Russia, said it plans a Feb. 1 meeting to review implementation of its latest oil output cut.
US Federal Reserve officials appeared increasingly convinced inflation was coming under control, according to the minutes of US central bank’s December meeting.
The Fed is widely expected to keep rates on hold in January. Traders have priced in a 65.7% chance of a 25-basis-point rate cut in March, according to CME Group’s FedWatch tool.