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Oil at $68 on Libya force majeure, although rising pandemic cases in Asia limit gains

Oil rose to $68 a barrel and hit its highest in a month on Tuesday, supported by a disruption to Libyan exports and expectations of a drop in US crude inventories, although rising coronavirus cases in Asia limited gains.

Libya declared force majeure on exports from the port of Hariga and said it could extend the measure to other facilities.

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US crude stockpiles are expected to drop by 2.9 million barrels in weekly reports.

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Brent crude was up 86 cents, or 1.3 percent, to $67.91 a barrel by 0822 GMT after hitting $68, the highest since March 18, earlier. US West Texas Intermediate (WTI) crude gained 85 cents, or 1.3 percent, to $64.23.

“Follow-through buying is pushing prices further up,” said Tamas Varga of oil broker PVM. “But the immediate upside potential could be limited by the relentless march higher in infection rates.”

Worldwide coronavirus cases have exceeded 141.7 million and a surge in infections in India, the world’s third-biggest oil importer, has dampened optimism for a sustained demand recovery.

Elsewhere in Asia, the Philippines has seen a second wave of infections. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 for two weeks.

Oil was underpinned by a weak US dollar, which makes oil cheaper for buyers using other currencies.

“US dollar weakness continues to offer support to the commodities complex,” ING Economics said in a report.

Brent has recovered from historic lows last year, helped by some demand recovery and huge output cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.

In focus later will be the weekly report on US supplies from the American Petroleum Institute, due out at 2030 GMT.

OPEC+ is scheduled to meet on April 28 to consider further tweaks to its supply pact.

Next articles OPEC raises 2021 oil demand growth forecast on hopes COVID-19 impact subsides

 

 

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