© Reuters. FILE PHOTO: Storage tanks are seen at Marathon Petroleum’s Los Angeles Refinery, which processes home & imported crude oil into California Air Resources Board (CARB), gasoline, diesel gasoline, and different petroleum merchandise, in Carson, California, U.S., Ma
By Mohi Narayan and Sonali Paul
(Reuters) -Oil costs rose on Tuesday as traders fretted over tight world supply after Libya was pressured to halt some exports and as factories in Shanghai ready to reopen put up a COVID-19 shutdown, easing some demand worries.
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futures rose 61 cents, or 0.5%, to $113.77 a barrel at 0349 GMT, whereas U.S. West Texas Intermediate (WTI) crude futures gained 33 cents, or 0.3%, to $108.54 a barrel.
Gains have been restricted with the greenback buying and selling at a recent two-year excessive. A stronger greenback hurts oil patrons holding different currencies.
Both benchmark contracts gained greater than 1% within the earlier session after hitting their highest since March 28 on political disaster in Libya. The nation mentioned it couldn’t ship oil from its greatest oil subject and shut one other subject due to political protests.
“Outages in Libya deepened concern over tight global supply and the Ukraine crisis dragged on, offsetting concern over slowing Chinese demand,” mentioned Ajay Kedia, director at vitality consultancy Kedia Commodities.
The newest supply hit got here simply as gasoline demand in China, the world’s largest oil importer, was anticipated to decide up as manufacturing crops ready to reopen in Shanghai.
Although oil costs are nonetheless susceptible to demand shocks as China continues to impose powerful curbs to comprise COVID outbreaks.
“For oil prices to take off on a sustainable trajectory, reopening mainland cities is necessary for translating into a sustainable economic rebound that supports oil demand,” SPI Asset Management’s managing director, Stephen Innes, mentioned in a observe.
The Libya outage highlights simply how bullishly reactive oil markets have grow to be to supply shocks, Innes added.
Meanwhile the potential for a European Union ban on Russian oil for its invasion of Ukraine continues to hold the market on edge. On Tuesday Ukraine mentioned Russia, which calls its actions a “special operation”, had began an anticipated new offensive within the east of the nation.
“Market sentiment was supported by the Russian minister saying more countries banning Russian oil imports would mean oil prices exceeding historic highs,” ANZ Research analysts mentioned in a observe.