Production outages in Canada and Libya oil export concerns have led to an increase in oil prices.
However, prices remain under pressure from the Organization of the Petroleum Exporting Countries (OPEC) decision to raise supply and an ongoing trade war between the US and other major economies, including the EU, China and India.
Brent crude futures soared 35 cents to trade at $75.08 a barrel, while US light crude jumped 35 cents, trading at $68.43, Reuters reported.
Brent prices increased due to uncertainty surrounding oil exports by Libya after Eastern Libyan commander Khalifa Haftar’s forces handed over control of oil ports to a separate National Oil Corporation (NOC) based in the country’s eastern region.
As a result, the Tripoli-based official state-owned oil company will no longer be allowed to handle that oil.
Energy consultancy Trifecta director Sukrit Vijayakar was quoted by the news agency as saying: “The move increases the risk that Libyan oil output will be shut in as the NOC in Tripoli is the only legal entity with the right to sell oil.”
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Suncor Energy’s Syncrude oil sands facility is facing production issues due to power outage last week.
This resulted in front-month US crude reaching its highest premium above second-month futures since 2014.
On 23 June, OPEC made an announcement to increase production by around one million barrels per day following a biannual meeting in Vienna on the previous day.
Despite OPEC electing to raise supplies, analysts opined that the markets will continue to experience tightness.
Investment bank Jefferies’ Jason Gammel said: “Despite the OPEC agreement (last week) we believe that tight supply is likely to drive oil prices higher during 2018.”