Oil prices jumped to their highest in more than week after blockades began to shut down two Libyan oilfields.
Two major oilfields in southwest Libya began to shut down on Sunday after forces loyal to Khalifa Haftar closed a pipeline. This move may cut national output to a fraction of its normal level, the National Oil Corporation (NOC) said.
The closure, which follows a blockade of major eastern oil ports, risked taking almost all the country’s oil output offline.
However, the earlier rise in oil prices eased after some analysts and traders said supply disruptions in Libya will be short-lived. Further, the disruptions could be offset by other producers, limiting the impact on global markets.
Brent crude was up 41 cents, or 0.6%, at $65.26 by 1116 GMT, having earlier touched $66 a barrel, the highest since Jan. 9.
The WTI contract was up 27 cents, or 0.5%, at $58.81 a barrel, after rising to $59.73, the highest since Jan. 10.
Foreign powers agreed at a summit in Berlin to shore up a truce in Libya which has been in turmoil since the fall of Gaddafi in 2011. The EU’s top diplomat Borrell said on Monday the EU will discuss all ways to uphold a formal ceasefire in Libya.
START TRADINGForex – Oil prices jump after Libyan shut down
Trading volumes were thin as Lunar New Year approaches in Asia and with US markets closed for Martin Luther King day. Investors are focused on central bank meetings in Japan, on Tuesday, and the European Central Bank meeting on Thursday.
The dollar rose to its strongest level of 2020 after last week’s run of data confirmed that the U.S. economy is holding up well. The greenback edged up 0.1% against a basket of currencies, with the index rising to as high as 97.727, its strongest since Dec. 24
The euro has failed to benefit much from the more positive noises, however. The euro/dollar exchange rate is firmly stuck within a tight trading range. The common currency was down marginally at $1.1085.
Japan’s yen was unchanged against the dollar at 110.15 yen ahead of the BoJ meeting on Tuesday. The BoJ is expected to keep policy steady.
The Australian and New Zealand dollars about 0.2%. Caution remained as investors look to Australian jobs data due on Thursday for a crucial clue to the next move for Australian interest rates.
Sterling dropped on Monday to as low as $1.2962, down 0.3%, after weekend comments by finance minister that Britain would not commit to sticking to EU rules in post-Brexit trade talks.
Sterling also declined versus the euro to 85.315 pence, down 0.1% on the session.
The focus this week will be on Friday’s PMI numbers, which analysts say are the remaining key data releases to gauge whether the BoE will cut interest rates at its Jan. 30 meeting.
Gold gained to around $1,560 an ounce, after reaching a seven-year high earlier this month at the height of Iran-U.S. tensions.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money