Oil yesterday extended its gains above US$52 a barrel as a planned production boost from Libya stalled amid continuing tension in the OPEC member exempt from agreed output cuts.
Futures climbed as much as 1.2 percent in New York after rising 2 percent 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, an engineer said.
The guards prevented the flow of oil by pipeline, Khaled Hadloul, an engineer at Mellitah Oil and Gas, which operates El Feel, said by telephone.
The Repsol SA-operated Sharara field is also yet to restart, because both fields feed into the same pipeline network, Hadloul said.
Money managers increased their net-long positions on West Texas Intermediate (WTI) to the highest since July 2014, US Commodity Futures Trading Commission data showed.
Oil has traded near US$50 a barrel since OPEC on Nov. 30 agreed 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 next year 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,” Spooner said.
WTI for January delivery, which expires today, yesterday rose as much as US$0.62 to US$52.52 a barrel on the New York Mercantile Exchange and was at US$52.30 at 2:14pm in Singapore.
The contract gained US$1 to US$51.90 on Friday. Total volume traded was about 6 percent above the 100-day average. The more-active February future gained US$0.40 to US$53.35 a barrel.
Brent for February settlement yesterday climbed as much as US$0.59, or 1.1 percent, to US$55.80 a barrel on the London-based ICE Futures Europe exchange.
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