Oil Prices rebound amid Middle East tensions and Libya output cuts
Shafaq News/ Oil prices rebounded bymore than 1% on Tuesday, paring previous session's losses, on supply concernsamid an escalating Middle East conflict, stronger US services sector data and acut in production at Libya's Sharara oilfield.
Brent crude futures gained 97 cents,or 1.27%, to $77.27 a barrel by 0354 GMT, while US West Texas Intermediatecrude futures climbed $1.14, or 1.56%, to $74.08.
On Monday, both benchmarks fellabout 1% against a backdrop of falling global stock markets.
Oil's slide was limited by mountingconcerns that Iran, a key Middle Eastern producer, may retaliate against Israeland the US for the assassination of a Hamas leader in Tehran and an Israeliattack that killed a Hezbollah commander in Lebanon, potentially leading to awider regional war.
On Monday, at least five US personnelwere injured in an attack against a military base in Iraq, US officials toldReuters. It was unclear whether the attack was linked to the retaliationthreats.
"Oil seems to have clawed backsome of its losses as broader concerns of a possible escalation in MiddleEastern conflict continue to add (to) apprehensions in (the) oil market. Thepossibility of an all-out war in (the) Middle east is getting real, threateningglobal supplies," Priyanka Sachdeva, a senior market analsyt at PhillipNova in Singapore, said in an email.
The US has been urging countries toconvey to Iran that escalation is not in its interest, a State Departmentspokesperson said on Monday.
Oil was also supported by overnightdata showing services sector activity in the US, the world's biggest oilconsumer, rebounded from a four-year low in July.
Oil's gains also occurred amid abroader rally in Asian equity markets after they plunged on Monday.
"Relief rallies in globalmarket overnight also seemed to have repaired overall sore sentiments, sparkingsome fresh position taking in oil," Phillip Nova's Sachdeva said.
Concerns of lower production atLibya's 210,000 barrel-per-day Sharara oil field also buoyed prices. Output atthe field, one of the country's largest, has fallen by around 20% due toongoing protests.
These production troubles haveoffset some of the earlier macro bearishness in the market, said ING analystsin a client note.
(Reuters)
