Oil steadied after its steepest weekly loss in a month as Libya resumed production at its biggest oilfield following a brief halt.
Futures in New York rose 0.2 percent after a 3.6 percent decline last week. The Sharara field, Libya’s biggest, has started producing again after stopping on Sunday following a closure of the pipeline carrying oil to the Zawiya refinery, according to a person with knowledge of the matter. The halt came shortly after protests disrupted output at another Libyan deposit in February.
Libyan production had been surging in recent months, becoming a thorn for the market on concern that further growth could test the country’s pledge to curb production as part of OPEC’s plan to limit a global oversupply. The increase, together with warnings of rising U.S. output from organizations including the the International Energy Agency, has prevented prices from regaining the highs of January even as most OPEC members continue to cut supply.
“An early bout of strength is fizzling out as warnings from the IEA concerning the surge in U.S. shale oil output weighs on sentiment,” said analysts at PVM Oil Associates Ltd. “Adding a further dose of bearish impetus are reports that pumping from Libya’s Sharara oilfield has resumed.”
West Texas Intermediate for April delivery rose as much as 72 cents to $61.97 a barrel on the New York Mercantile Exchange and traded at $61.34 as of 12:25 p.m. London time. Last week’s drop was the first weekly decline in three weeks. Total volume traded Monday was about 1 percent below the 100-day average.
Brent for May settlement rose 7 cents to $64.44 a barrel on the London-based ICE Futures Europe Exchange. Front-month futures slipped 4.4 percent last week. The global benchmark traded at a $3.24 premium to May WTI.
Oil shipments from Libya jumped to 1.19 million barrels a day last month, the highest since Bloomberg began tracking tankers from the country in July 2014. Still, production remains threatened by the lingering effects of civil strife that erupted earlier in the decade, and is well below the 1.6 million barrels a day pumped before the ouster of former leader Muammar Qaddafi.
At the same time, investors are also focusing on the U.S., where explorers have boosted the number of rigs drilling for crude to 800 for the first time in almost three years, according to Baker Hughes data released Friday. American crude output has increased to a record of more than 10 million barrels a day.
Other oil-market news:
The U.S. will dominate global oil markets for years to come, satisfying 80 percent of demand growth to 2020 as the shale boom keeps OPEC under pressure, the International Energy Agency said Monday in a report. CERAWeek by IHS Markit, the largest gathering of energy executives and officials in the Americas, begins on Monday, when OPEC Secretary-General Mohammad Barkindo will dine with shale executives in Houston. Money managers boosted bets on rising WTI crude prices by the most in six weeks during the week ended Feb. 27, according to the U.S. Commodity Futures Trading Commission.