Oil Rises to 7-Week High on Kazakh Unrest, Libya Outages
Oil traded higher early on Thursday as Libya exports continue to falter while civil unrest in Kazakhstan raises concern over the security of the central Asian country’s production, even as spreading Covid-19 infections are cutting into demand.
West Texas Intermediate crude for February delivery was last seen up US$1.17 to US$79.02 per barrel, the highest since mid-November, while March Brent crude, the global benchmark, was up US$1.01 to US$81.81.
Russia and its allies have sent troops to help quell unrest in Kazakhstan, where riots erupted following a hike to fuel prices. The country is a member of the OPEC+ group but there are not yet any reports that its oil exports are being affected by the unrest.
“The political situation in Kazakhstan is becoming increasingly tense. And this is a country that is currently producing 1.6 million barrels of oil per day,” Commerzbank analyst Barbara Lambrecht said in a note.
Libya’s output has dropped by about 500,000 bpd due to repairs to a key pipeline and the closure of the country’s largest oilfield by a militia group, Reuters reported.
The supply worries are being offset by demand weakness due to the wildfire spread of the Covid-19 omicron variant, responsible for record infections in the United States and elsewhere.
The Energy Information Administration on Wednesday reported that while US crude-oil inventories fell for a sixth-straight week, gasoline inventories rose by 10.1 million barrels, the largest weekly rise since April 2020.
“The big gasoline build was fueled by implied demand plummeting -1.6mmbpd and net exports fading,” Tudor, Pickering and Holt analyst Dhruv Kharbanda said in a note. # Oil Rises to 7-Week High on Kazakh Unrest, Libya Outages
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