Oil prices rose as fresh tensions over Ukraine prevented oil sellers from becoming more aggressive in increasing oil production.
Brent crude rose by eight cents to $109.17 a barrel, while US oil increased by 26 cents to settle at $101.76, reported Reuters.
Crude prices increased after the US Secretary of State John Kerry warned Russia that it faced broader economic and industrial sanctions from the US and Europe if it meddled in Ukraine’s presidential elections on 25 May.
But oil prices dropped in the previous session as total US crude inventories increased to 398.5 million barrels in the week ending 9 May, although stocks at the key delivery hub in Cushing, Oklahoma, fell by 592,000 barrels.
The decline in prices was also supported by the gradual resumption of output from Libya.
Libya’s El Feel oilfield has reached full capacity and the Wafa field started operating after being blocked by protesters.
Libyan National Oil Corporation (NOC) said that the country’s oil output is 300,000bpd with the two fields back on-line, compared with its total capacity of 1.4 million barrels per day.
Oil traders are keenly awaiting the results from the talks due to end today over Tehran’s nuclear programme, under which Iran is expected to curb its crude exports within limits agreed in November by Tehran and the six world powers as part of the interim pact that partially eased sanctions over the nuclear programme.
The Paris-based International Energy Agency said that in April 2014, Iran’s oil exports averaged 1.11 million barrels per day, the second month in a row exports have fallen, which is close to the 1 million barrels per day allowed under November’s pact.
Image: Brent prices drop due to increased Libyan output. Photo: courtesy of freedigitalphotos.net /Sura Nualpradid.