Oil traded above US$59 a barrel as crude production in Libya fell below 1 million barrels a day after a pipeline explosion on Tuesday.
Futures were little changed in New York after slipping for the first time in more than a week on Wednesday.
While the halt at the pipeline that carries crude to Libya’s biggest export terminal will keep output below the cap it agreed to last month, it is said to need about a week for repairs.
Meanwhile, the American Petroleum Institute was said to report that US inventories dropped last week.
Government data is also forecast to show stockpiles declined.
Oil is heading for a second yearly advance as OPEC and its partners including Russia extended supply curbs through the end of next year. The disruption in the North African nation on Tuesday lifted prices to the highest level in more than two years, offsetting the effect from the return of a major UK North Sea pipeline after a shutdown.
“Oil’s rally on the pipeline explosion in Libya might be short-lived as it’s been reported that the repair might not take too much time,” Kiwoom Securities Co market strategist Kim Yumi said by telephone. “We will continue to see prices easing and then being elevated again because while falling stockpiles support prices, rising US production will restrain any increase.”
West Texas Intermediate for February delivery was at US$59.78 a barrel on the New York Mercantile Exchange, up US$0.14, at 4:06pm in Seoul. Total volume traded was about 34 percent below the 100-day average. The contract on Wednesday dropped US$0.33 to US$59.64.
Brent for February settlement, which expired yesterday, added US$0.18 to US$66.62 a barrel on the London-based ICE Futures Europe exchange after falling 0.9 percent on Wednesday. The global benchmark crude traded at a premium of US$6.85 to West Texas Intermediate. The more-active March contract was US$0.19 higher at US$66.18.
Libya’s production on Wednesday dropped to 950,000 barrels a day, a person directly involved in the matter said.
Output as of Monday last week was 1.08 million barrels a day, indicating a drop of 12 percent.
While loadings at the Port of Es Sider, Libya, are said to be down about 50 percent, it was this month scheduled to ship 13 cargoes, each carrying 600,000 barrels of crude, according to a loading plan obtained by Bloomberg.
US crude stockpiles last week dropped 5.96 million barrels, the American Petroleum Institute said, adding that gasoline inventories last week rose by 3.13 million barrels.
Oil stockpiles probably contracted by 3.75 million barrels last week, according to the median estimate of analysts in a Bloomberg survey before the release of US Energy Information Administration data yesterday.
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