Oil rises over 1% as Libya outages add to Russia supply fears

2 minute read

The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann

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  • Libya's NOC declares force majeure, warns of closures
  • China's economy slowed in March
  • Russian oil output down 7.5% in April so far - IFAX cites source

NEW YORK, April 18 (Reuters) - Oil prices rose more than 1% on Monday, with Brent crude topping $114 a barrel, as outages in Libya deepened concern over tight global supply amid the Ukraine crisis.

Adding to supply pressures from sanctions on Russia, Libya's National Oil Corp on Monday said "a painful wave of closures" had begun hitting its facilities and declared force majeure at Al-Sharara oilfield and other sites.

"With global supplies now so tight, even the most minor disruption is likely to have an outsized impact on prices," said Jeffrey Halley, analyst at brokerage OANDA.

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Brent crude , the global benchmark, rose $1.46, or 1.3%, to settle at $113.16 a barrel. The contract rose to $114.84 a barrel, its highest since March 28.

U.S. West Texas Intermediate rose $1.26, or 1.2%, to settle at $108.21 a barrel. The benchmark hit $109.81 a barrel, also the highest since March 28.

Deeper supply losses loom. Russian production declined by 7.5% in the first half of April from March, Interfax reported on Friday, and EU governments said last week the bloc's executive was drafting proposals to ban Russian crude.

Those comments came before an escalation in the Ukraine war. Ukrainian authorities said missiles struck Lviv early on Monday and explosions rocked other cities as Russian forces kept up their bombardments after claiming near full control of the port of Mariupol. read more

In a bearish signal for prices, China's economy slowed in March, taking the shine off first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs. read more

Data on Monday also showed China refined 2% less oil in March than a year earlier, with throughput falling to the lowest since October as the surge in crude prices squeezed margins and tight lockdowns reduced demand. read more

Oil surged to the highest since 2008 in March, with Brent briefly topping $134.

"There's still some confusion about whether they're reopening their economy, so we’re getting mixed signals out of China and that has presented a lot of volatility this morning," Price Futures Group analyst Phil Flynn said.

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Reporting by Stephanie Kelly in New York; additional reporting by Alex Lawler in London and Yuka Obayashi in Tokyo; Editing by Jacqueline Wong, Emelia Sithole-Matarise, Nick Macfie, Barbara Lewis and Cynthia Osterman

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Thomson Reuters

A New-York-based correspondent covering the U.S. crude market and member of the energy team since 2018 covering the oil and fuel markets as well as federal policy around renewable fuels.