2024-01-03T18:19:23+00:00
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/ Oil prices jumped about three percent, on Wednesday evening, after news of a complete cessation of production in the Libyan Sharara field, the largest oil field in Libya, which fueled fears that tension in the Middle East may reduce global oil supplies.
By 1606 GMT, Brent crude futures rose $2.44, or 3.2 percent, to $33.78 per barrel, while US West Texas Intermediate crude rose $2.45, or 3.5 percent, to $83.72 per barrel.
The two benchmarks rose for the first time in five days and are on their way to rise the most in one day since mid-November.
Two engineers told Reuters that the protests led to a complete halt in production in Libya’s Sharara oil field, which produces 300,000 barrels per day.
Victor Katona, senior oil market analyst at Kpler Consulting, said: “The closure of the Sharara field certainly increases the price rise, especially for Brent crude.”
Oil prices also rose due to attacks launched by the Yemeni Houthi group on ships in the Red Sea.
The Houthi group said that it “targeted” a container ship heading to Israel, a day after US Central Command announced that the Houthis had fired two anti-ship ballistic missiles in the southern Red Sea, but there were no reports of damage.
Israeli forces intensified their bombing of the Gaza Strip on Wednesday, after the war spread to Lebanon with the killing of the deputy head of the political bureau of Hamas in the southern suburb of Beirut.
The expansion of the conflict may lead to the closure of important waterways for transporting oil and disrupt supplies, which is what worries energy traders.
What added to the state of uncertainty in the Middle East was the death of more than 100 people in two explosions in Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), and the injury of dozens in a ceremony to commemorate the leader of the Revolutionary Guard, Qassem Soleimani, who was killed in an American drone attack in 2020.
OPEC confirmed that cooperation and dialogue within the organization and its allies, the alliance known as OPEC+, will continue after OPEC member Angola announced its withdrawal from the organization last month.
OPEC+ includes OPEC and allies, including Russia.
Before the release of weekly US inventory data, analysts polled by Reuters expected a decline in crude inventories in the latest week, with gasoline and distillate inventories likely to increase.
Separately, the US Department of Energy said it was seeking to purchase up to three million barrels of high-sulfur crude oil produced in the United States for delivery in April to help replenish the Strategic Petroleum Reserve.