Oil prices up

OIL prices rose yesterday, supported by an industry report showing a drop in US crude inventories, a cut in Libyan exports and an OPEC-led deal to trim output.

The American Petroleum Institute said on Tuesday that US crude inventories dropped by 10,2 million barrels last week, more than analysts had forecast. Official inventory figures are due later on Wednesday.

Brent crude, the global benchmark, rose $1.05, or 1,7 percent, to $61,25 by 8:18 a.m. ET (1318 GMT). It has still fallen by almost a third since early October. US West Texas Intermediate crude futures were at $52,66 per barrel, up $1,01, or 2 percent.

“The oil market is regaining further ground this morning in the wake of a bullish API report,” Stephen Brennock of oil broker PVM said, although he sounded a note of caution.

“After all, the fundamental outlook in early 2019 is still plagued by a supply surplus and is therefore not conducive for a sustained price rally.”

Oil has been supported this week by the supply loss in Libya, which declared force majeure on exports from the country’s largest oilfield on Sunday after tribesmen and state security guards seized the facility.

The Libyan cutback follows last week’s decision by the Organisation of the Petroleum Exporting Countries and some non-OPEC producers including Russia to cut supply by 1,2 million barrels per day (bpd) for six months from January 1.

“The OPEC+ deal from last week will allow more of a bullish position to be taken up by some market participants from this point,” analysts at JBC Energy said in a report.