(New York) Oil prices ended higher on Thursday as markets grew concerned about tighter supply as oil sites in Libya shut down.
Posted at 4:30 p.m.
A barrel of Brent North Sea oil for June delivery gained 1.43% to $108.33.
The barrel of West Texas Intermediate (WTI) US for delivery the same month, which is the first day of use as a benchmark contract, advanced 1.56% to 103.79 dollars.
“The concern of the day is the loss of production of 550,000 barrels per day in Libya due to protests,” said Andy Lipow of Lipow Oil Associates.
“This worries the market while at the same time refiners and brokers avoid buying Russian oil,” added the analyst, which tightens the supply.
Oil production in Libya is once again hostage to political divisions, with a wave of forced closures of oil sites as a result of the clash between two rival governments.
The National Petroleum Company (NOC) announced in recent days the cessation of operations in two major oil terminals and the closure of several fields.
This turbulence comes at a time when “oil and gas prices are soaring” under the impact of the war in Ukraine, lamented the NOC.
At the same time, the market “continues to be characterized by a tug of war between concerns about demand and those about supply disruptions,” commented Carsten Fritsch, analyst at Commerzbank.
“The constant swings in oil prices are proof of that,” he continues, with both oil benchmarks having had a turbulent week.
Oil prices plunged after the International Monetary Fund (IMF) lowered its global growth estimate for 2022, linked to the consequences of the war in Ukraine and the sanctions imposed on Russia.
“Meanwhile, the decline in Russian oil production continues,” recalls Carsten Fritsch.
“The European Union will probably find it more difficult to find other suppliers, which it will have to do to agree an oil embargo against Russia”, warns the analyst.
Germany reiterated Wednesday its intention to stop buying Russian oil by the end of the year, recalled Andy Lipow.
“This will have a bullish impact on prices, as more and more European countries will do the same and seek supply alternatives,” concluded the analyst.