September 02, 2024 23:29 GMT
Crude Higher As Libyan Dispute Impacts More Output
OIL
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After falling sharply, oil prices rose moderately in thin holiday-impacted trading on Monday supported by a further cutback in Libyan oil production. Supply/demand fundamentals are at the fore again with the weak August PMI adding to concern over China’s demand and OPEC’s planned increase in output beginning next month. The USD index rose 0.1%.
- WTI rose 0.7% to $74.04/bbl after a high of $74.41. It has started today lower at $73.60. It remains well above the bear trigger at $70.88, August 5 low. A clear breach of this would confirm the resumption of the bear cycle. Initial resistance is at $76.09 and key resistance at $78.54.
- Brent is 0.5% higher at $77.28/bbl after a high of $77.63 and is currently around $77.52. Key support is at $74.62, while initial support is at $78.40, 20-day EMA.
- Libya declared force majeure, to protect it contractually from an unforeseen event, at another important oilfield. The political dispute between the country’s two governments over the control of the central bank which manages oil revenues has resulted in the almost 1mbd reduction in Libyan output.
- OPEC is scheduled to increase output by 180kbd from October and the sharp reduction in Libyan output may give it the reason to go ahead despite lower prices. Some delegates have said the pickup will happen as planned.
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