Oil prices rose on Monday, with Brent crude topping $113 a barrel, as outages in Libya deepened concern over tight global supply and the Ukraine crisis dragged on, offsetting concern over slowing Chinese demand.
Adding to supply pressures from sanctions on Russia, Libya’s National Oil Corp warned that, “a painful wave of closures” had begun hitting its facilities and declared force majeure at Al-Sharara oilfield and other sites.
“With global supplies now so tight, even the most minor disruption is likely to have an outsized impact on prices,” said Jeffrey Halley, an analyst at brokerage OANDA.
Brent crude, the global benchmark, rose $1.37, or 1.2 per cent, to $113.07 at 1332 GMT, not far from the highest since March 30 of $113.80 hit earlier in the session. United States West Texas Intermediate gained $1.48, or 1.4 per cent, to $108.43.
The Libyan developments offset concern about demand in China, where the economy slowed in March, taking the shine off first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs.
“Some Asian investors booked profits as they became worried about slowing demand in China,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Data showed China refined two per cent less oil in March than a year earlier, with throughput falling to the lowest since October as the surge in crude prices squeezed margins and tight lockdowns hurt demand.
In March, oil surged to the highest since 2008, with Brent briefly topping $134.
The Associated Press reported that there were concerns of deeper supply losses looming as Russian production declined by 7.5 per cent in the first half of April from March and EU governments said last week the bloc’s executive was drafting proposals to ban Russian crude.
