London, April 19 (BNA): Oil prices rose today, Tuesday, as investors worried about tight global supply after Libya was forced to halt some exports and as factories in Shanghai prepared to reopen after the Covid-19 shutdown, easing demand concerns.
Brent crude futures rose 61 cents, or 0.5 percent, to $113.77 a barrel at 0349 GMT, while US West Texas Intermediate crude futures rose 33 cents, or 0.3 percent, to $108.54 a barrel, according to Reuters.
Gains were limited with the dollar trading at its highest level in two years. A strong dollar hurts oil buyers who hold other currencies.
Both benchmark contracts rose more than 1% in the previous session after hitting their highest levels since March 28 due to the political crisis in Libya. The state said it could not transport oil from its largest oil field and closed another field due to political protests.
“The outages in Libya deepened concern about global supply tightness and the Ukrainian crisis continued, which reduced concerns about slowing Chinese demand,” said Ajay Kedia, director of energy consultancy Kedia Commodities.
The latest supply hit came as demand for the fuel was expected to rise in China, the world’s largest oil importer, as manufacturing plants prepared to reopen in Shanghai.
Although oil prices remain vulnerable to demand shocks as China continues to impose strict restrictions to contain the outbreak of the Corona virus.
“For oil prices to launch on a sustainable path, reopening mainland cities is essential to translate it into a sustainable economic recovery that supports oil demand,” Stephen Innes, managing director of SPI Asset Management, said in a note.
Ines added that the power outage in Libya highlights the extent to which oil markets have become reactive to supply shocks.
FKN