Oil prices were steady yesterday, as fighting in Libya and falling Venezuelan and Iranian exports raised concerns over tightening global supply, but uncertainty surrounding an Organisation of Petroleum Exporting Countries (OPEC)-led production cut limited gains.
Brent crude, the global benchmark, was up 19 cents at $71.37 a barrel. Brent hit a five-month high at $71.87 on Friday.
U.S. West Texas Intermediate crude gained 29 cents, or half a per cent, to $63.69. WTI was trading about a dollar below last week’s high going back to Nov. 1.
“We are still viewing the price consolidation of the past week as a pause in a sustainable bull market in which fresh highs still represent a strong possibility,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
In Libya, fighting between Khalifa Haftar’s Libyan National Army and the internationally-recognized government has raised the prospect of lower supplies from the OPEC member.
U.S. sanctions on two other members, Iran and Venezuela, are already cutting shipments. Iran’s crude oil exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said.
“Collapsing Venezuelan oil output and sanctioned Iranian exports have a put big question mark over supply,” said Norbert Ruecker of Swiss bank Julius Baer.
“With the many supply threats, the market mood turns more bullish by the day and this should support prices over the coming weeks.”
Adding downward pressure were concerns about Russia’s willingness to stick with OPEC-led supply cuts and expectations of higher U.S. inventories.