Oil extends advance above $52 as Libyan output comeback stalls

Oil extended its gains above $52 a barrel as a planned production boost from Libya stalled amid continuing tension in the Organisation of Petroleum Exporting Countries (OPEC) member exempt from agreed output cuts. Futures climbed as much as 0.6 per cent in New York after rising 2 per cent on Friday. Libyan oil-facility guards have backtracked on an agreement to allow supply to flow from the El Feel and Sharara fields, two of the country’s biggest, according to an engineer that operates El Feel. Money managers increased their net-long positions on West Texas Intermediate to the highest since July 2014, US Commodity Futures Trading Commission data showed. Oil has traded near $50 a barrel since the OPEC agreed November 30 to reduce production for the first time in eight years. Goldman Sachs Group Inc. last week increased its second-quarter crude price forecasts and predicted stockpiles would return to normal levels by the middle of 2017 amid the curbs that include non-OPEC nations from Russia to Mexico. “Libya is the largest key variable on the supply side in the short term, so the fact there is an element of doubt on field restarts is one thing supporting the market,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The downside for oil is fairly limited at the moment after the OPEC agreement to cut production.” WTI for January delivery, which expires Tuesday, rose as much as 33 cents to $52.23 a barrel on the New York Mercantile Exchange and was at $52.07 at 8:35 am in Hong Kong. The contract gained $1 to $51.90 on Friday. Total volume traded was about 31 per cent below the 100-day average. Brent for February settlement gained as much as 37 cents, or 0.7 per cent, to $55.58 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.22 to February WTI. (Ben Sharples/Bloomberg)

More from Business News