Oil continues to float below $80, supply woes push prices up

Oil prices continue to trade below $80 amid daily increase on Thursday with global supply concerns triggered by a lower-than-expected draw in US crude stocks, Libya oil filed shutdown and ongoing attacks on energy infrastructure between Russia and Ukraine.

International benchmark Brent crude increased 0.21% to $77.74 per barrel at 10.25 a.m. local time (0725 GMT), up from the previous session’s close of $77.58.

US benchmark West Texas Intermediate (WTI) rose by 0.27% to $74.72 per barrel, after closing at $74.52 in the prior session.

Weak economic data from China, the world’s largest oil importer, and the US, the largest oil consumer, triggered a fall in Brent oil prices after trading at $80.40 on Aug. 15.

On Aug. 26, following the declaration of the eastern-based Libyan Government, headed by Osama Hammad, to suspend oil production in the country, Brent prices once again climbed above $80, hitting $80.20 during the day, due to global supply concerns.

However, prices failed to reach this level in the past three sessions and remained below $80.

Both benchmarks marked a partial increase on Thursday following data from the Energy Information Administration (EIA) indicating a daily drop in US crude oil inventory by 800,000 barrels, compared to the market prediction of a fall of around 2.7 million barrels.

Concern over potential supply shortages due to the suspension of oil production in Libya supported upward price movements.

Due to conflicts over the management of the Central Bank, the government of Libya, which is based in the east and is led by Osama Hammad, declared ‘force majeure’ on Monday in all oil fields, ports, and institutions and said that oil production and exports would be suspended.

Libya, one of the major members of the Organization of the Petroleum Exporting Countries (OPEC) group, produced 1.18 million barrels of crude oil per day in July.

Meanwhile, conflict between Russia and Ukraine lent upward support to oil prices by fueling market players’ supply fears as both countries continue to target critical energy infrastructures.

Russia on Wednesday said that a Ukrainian drone attack caused a fire at an oil facility in the country’s Kirov region, marking the first such attack on the region.

‘Today, starting at 10 a.m. (0700 GMT), the Kirov region was attacked by enemy drones. As a result of timely measures taken, two drones were shot down, three fell on the territory of the Zenit plant in Kotelnich and caught fire,’ Governor Aleksandr Sokolov said on Telegram.

On the other hand, Ukraine on Monday said that at least five people were killed and 30 injured as 15 regions were affected by Russian airstrikes that targeted the country’s energy infrastructure.

Last week, Russia claimed that Ukraine launched a drone attack on the Kursk Nuclear Power Plant, with the drone being shot down near a spent nuclear fuel storage facility. Russian authorities on Wednesday declared that they introduced restrictions on entries into a town near the Kursk Nuclear Power Plant.

• EIA
• Oil Prices
• WTI