Oil prices continued to rise on Monday in international markets above the level of $55, supported by the shutdown of the largest oil field in Libya, as well as increased tensions following the missiles fired by the U.S. at a Syrian airport late last week.
>>>Will Libya Threaten OPEC’s Agreement on Oil Production Cuts?
This morning, the price of a barrel in the London market rose by 42 cents compared to the previous close, to $55.66, while in the American market, a barrel was traded at a price 33 cents higher, $52.57.
Reasons for the Increase in Oil Prices
The Libyan oil field Sharara was closed on Sunday after an armed group blocked the pipeline connecting it to the oil terminal. At the beginning of April, this field resumed production after a seven-day interruption, but it is now closed again.
– Significant and unplanned production outages support oil prices, said Carsten Fritsch from Commerzbank.
Prices are also rising due to heightened tensions in the Middle East, which accounts for more than a quarter of global oil production. Crude oil prices rose on Friday after the United States fired missiles at the Syrian government airport. Prices are also supported by the production cut agreement led by OPEC members. They agreed at the end of last year to reduce oil production by 1.8 million barrels per day in the first six months of 2017. Members, such as Libya and Nigeria, are exempt from participating in this reduction. Last week’s price increase was due to “relatively high OPEC compliance with the agreed cuts and widespread belief that the production cuts will be extended into the second half of the year, as well as geopolitical movements,” reported Tamas Varga from PVM.
