Oil above $55 on Libya, Syria

london — Oil rose further above $55 a barrel on Monday, supported by another shutdown at Libya’s largest oil field and heightened tension over Syria following the US missile strike.

Libya’s Sharara oilfield was shut on Sunday after a group blocked a pipeline linking it to an oil terminal, a Libyan oil source said. The field had only just returned to production, after a week-long stoppage ending in early April.

“It means that at least one potential source of additional supply has fallen away for the time being,” said Carsten Fritsch of Commerzbank, referring to the Libyan outage.

Brent crude, the global benchmark, rose 48 cents to $55.72 at 0947 GMT, not far from the onemonth

The developments in syria should be factored in as an additional risk premium in the oil price Bjarne Schieldrop, analyst at SEB

high of $56.08 reached on Friday. US crude was up 37 cents at $52.61.

Oil also climbed on heightened tension in the Middle East. Crude rallied last week after the United States fired missiles at a Syrian government air base.

“The developments in Syria should be factored in as an additional risk premium in the oil price going forward, especially now that oil inventories are drawing down and the market is no longer in massive surplus,” said Bjarne Schieldrop, analyst at SEB.

He expects Brent to average $57.50 in the second quarter, “which means we are likely to see $60 printed at times during this period.”

Libya’s Sharara field was previously shut for a week until April 2. The Opec state has been pumping a fraction of potential output for most of the time since the 2011 civil war.

Oil prices have also been supported by a deal led by the Organisation of the Petroleum Exporting Countries to cut output by 1.8 million barrels per day for the first six months of 2017. Libya and Nigeria are exempt from cuts.

Last week’s rise in prices was due to “the relatively high Opec adherence to the supply cut agreement and the general belief that the deal will be extended and, secondly, because of geopolitical developments,” Tamas Varga of oil broker PVM said. — Reuters