Brent prices, the global oil benchmark, have hit a five-month high amid crude supply concerns due to escalating violence in Libya.
Any disruption to oil supplies from Libya may worsen the situation, as oil supplies have already declined due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and US sanctions on Iran and Venezuela.
Brent jumped to $71.34 a barrel, its highest since November 2018, and later settled at $71.24. US crude also touched $64.77 per barrel and was later trading at $64.62, reported Reuters.
PVM official Tamas Varga was quoted by the news agency as saying: “Libya’s oil production and exports have not been jeopardised but the rise in tension is enough to send oil prices higher.”
An OPEC member, Libya delivers around 1.1 million barrels per day (Mbpd) to the market. Ongoing supply cuts led by OPEC members and other allies have tightened the market leading to Brent crude prices soaring by more than 30%.
However, concerns of global economic slowdown and weaker demand continue to remain. Rising crude inventories in the US also restricted the oil prices from further growth. Last week, the US stocks were predicted to have increased by 2.5 million barrels. The official figures are due on Wednesday.
Earlier, investment bank Goldman Sachs raised its forecast for crude oil prices in 2019. It now expects Brent crude prices to average $66 per barrel compared to earlier estimates of $62.50.