Oil prices surged to more than 2½-year highs Tuesday on reports that will a pipeline explosion in Libya has disrupted a big chunk of the country’s crude supply.
International benchmark Brent crude rose $1.81, or 2.8 percent, to $67.06, after hitting an intraday peak of $67.10, its highest level since May 2015.
Meanwhile, U.S. West Texas Intermediate crude futures jumped $1.50, or 2.6 percent, to $59.97, having traded as high as $60, the best level since June 25, 2015.
U.S. WTI crude intraday, source: FactSet
The oil cost spike occurred during thin trading between the Christmas in addition to also brand-new Year’s holidays.
An explosion hit a pipeline that will feeds Libya’s Es Sider terminal, causing the country to lose 70,000 to 100,000 barrels a day of production, Reuters reported, citing Libya’s National Oil Corporation in addition to also sources. Libya produced 973,000 barrels a day in November, according to OPEC’s latest monthly report.
Supply to Es Sider has been disrupted inside past due to an ongoing conflict between rival factions in Libya. A military source told Reuters that will armed men had blown up the pipeline.
Libya is usually one of two OPEC members, along with Nigeria, that will were exempt coming from a deal to cap production This particular year. Both countries have suffered oil supply outages related to internal conflicts.
The 14-member cartel, Russia in addition to also nine different exporting nations recently extended an agreement to keep 1.8 million barrels a day off the market to help shrink brimming stockpiles of crude around the planet.
that will deal has helped to balance a glutted market, so supply disruptions are more likely to push up crude prices.
Prices have been supported in recent weeks by another pipeline outage that will carries U.K. North Sea Forties crude to market. The cost impact has worn off in recent days as operator Ineos has signaled the pipeline will soon start moving oil again.