Oil prices soar higher as Libyan unrest threatens output
International benchmark Brent futures reached US$71.24 per barrel at around 8.00am Greenwich mean time on Tuesday, while the US West Texas Intermediate crude futures traded at US$64.59 per barrel.
Oil prices soared higher on Tuesday on expectations of tightened global supplies due to the fighting in Libya, as well as the ongoing supply cuts from the Organization of the Petroleum Exporting Countries (Opec) and sanctions from the United States (US) against Iran and Venezuela.
International benchmark Brent futures reached US$71.24 per barrel at around 8.00am Greenwich mean time on Tuesday, while the US West Texas Intermediate (WTI) crude futures traded at US$64.59 per barrel.
Brent’s session high of US$71.24 and WTI’s US$64.59 mark the highest prices since November.
The prices are a step up from Monday's session, which saw Brent at a session high of US$71.19 and WTI at US$64.44.
Disruption to Libyan exports could lead to supply crunch
Investors are currently focused on supply concerns due to the fighting and unrest seen in oil-rich nation Libya.
The disruption to oil supplies from the North African country would affect European refiners, disrupt exports and could further tighten the market, leading to a global supply crunch.
If the fighting starts to reduce exports, it could lift the prices of Brent even further.
Analysts are expecting Brent to rise to US$75 per barrel or higher in the near term.
On top of the crisis seen in Libya, the Opec has pledged to withhold around 1.2 million barrels per day of oil supply since the start of this year while the US sanctions on Iran and Venezuela continue to limit supply. Those factors also drove the prices of crude oil up.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Speculate on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
Live prices on most popular markets