Oil prices rise amid Libyan production halt, Middle East tensions
Date
8/27/2024 5:57:16 AM
(MENAFN) Oil prices experienced a notable increase of approximately 3 percent during Monday's trading session, driven by a near-total shutdown of oil production in Libya and ongoing concerns over potential disruptions to Middle Eastern oil supplies. brent crude futures climbed by USD2.30, or 2.91 percent, reaching USD81.32 per barrel by 11:48 GMT, while U.S. crude futures rose by USD2.22, or 2.97 percent, to USD77.05 per barrel. Brent crude reached USD81.35 per barrel, marking its highest level in 11 days.
The surge in prices followed the Libyan eastern-based parliament government's declaration of force majeure on all oil fields, ports, and facilities, which has halted oil production and exports indefinitely. This decision significantly impacts the oil supply as most fields are controlled by this government. However, the National Oil Corporation based in Tripoli, which oversees the country's oil resources, has yet to confirm this development.
The price hike also follows recent geopolitical events, including an escalation between Hezbollah and Israel. On Sunday, Hezbollah launched rockets and drones into Israel, prompting a significant military response from Israel, which targeted Lebanese positions with around 100 aircraft. Additionally, oil prices had previously risen on Friday due to Federal Reserve Chairman Jerome Powell's support for potential interest rate cuts, which bolstered market sentiment. Despite these factors, investors remain cautious about future output increases from OPEC and its OPEC+ allies, who have plans to raise production later in the year, according to Priyanka Sachdeva, senior market analyst at Philip Nova.
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