Oil edges up as Libyan supply woes offset lower-than-expected U.S. stock draw
Shafaq News/Oil prices edged up on Thursday after two sessions of losses, as supplyconcerns over Libya returned to focus, although countered by asmaller-than-expected draw in U.S. crude inventories that sapped demandexpectations.
Brent crudefutures climbed 9 cents, or 0.11%, to stand at $78.74 a barrel by 0355 GMT,while U.S. West Texas Intermediate crude futures were up 15 cents, or 0.2%, at$74.67.
Bothcontracts lost more than 1% on Wednesday, after data showed U.S. crudeinventories dropped 846,000 barrels to 425.2 million last week, missing analystexpectations in a Reuters poll for a draw of 2.3 million.
Worries overdisruption in supplies from Libya, a member of the Organization of thePetroleum Exporting Countries (OPEC), were positive for the market, someanalysts said.
The Libyawoes, amid growing geopolitical concerns, will keep oil markets on edge, andare likely to limit downside to prices, said Priyanka Sachdeva, a senior marketanalyst at Phillip Nova.
Someoilfields in Libya have halted production amid a fight for control of thecentral bank, with one consulting firm estimating output disruptions of between900,000 and 1 million barrels per day (bpd) for several weeks.
Libya's Julyproduction was about 1.18 million bpd.
The lengthof the supply disruption could have a spillover effect on OPEC+ productionplans in the coming October, which in turn could impact oil markets positivelyif supply does not ease as expected.
"Aprolonged shutdown from Libya will give OPEC+ a bit more comfort in increasingsupply in 4Q24 as currently planned," ING analysts said in a client note,adding that a short disruption would makes the cartel's decision tougher,however.
"Underthis scenario, we believe they will be reluctant to bring additional supply tothe market when there are still lingering demand concerns."
Expectationsfor the U.S. central bank to start cutting interest rates next month alsosupported oil prices, with Federal Reserve Bank of Atlanta President RaphaelBostic saying it may be time for cuts, with inflation down farther andunemployment up more than anticipated.
Lowerinterest rates make borrowing cheaper, which could boost economic activity andincrease demand for oil.
(Reuters)
