Oil prices climb on Libya pipeline attack

According to media reports, oil traded near its highest close in more than two years following an attack on a pipeline feeding crude to Libya’s Es Sider terminal.

As the explosion reduced Libya’s crude oil output by 100,000 barrels/day, February WTI (NYMEX) crude gained $1.50/barrel to settle at $59.97/barrel on Tuesday after breaking through the $60/barrel threshold for the first time since June 2015 during the intraday session.

Similarly, ICE February Brent crude increased $1.77/barrel to settle at $67.02/barrel on Tuesday, after touching as high as $67.10/barrel during the intraday session.

Global oil prices were also supported by the closure of Forties pipeline system in the North Sea, which supplies up to 450,000 barrel/day of oil to the UK. However, the pipeline operator, Ineos, recently announced that the pipeline was set to restart in the New Year, which is likely to put a cap on higher crude prices.

Meanwhile, OPEC and non-OPEC members reached a consensus to extend production cuts throughout 2018 during the latest OPEC Conference that was held on November 30. However, OPEC’s and Russia’s efforts to curb supply glut might be undermined by the strong growth in U.S. shale output, according to some analysts.