Mediaboss Marketing

By Kevin Baxter and Biman Mukherji

Oil prices made slight gains Tuesday amid supply disruptions in Libya, but lingering concerns over Chinese growth and U.S. stockpiles kept prices within their recent trading corridor.

The May contract for global crude benchmark Brent was up 0.1% at $56.12 a barrel while April deliveries of its U.S. counterpart West Texas Intermediate gained 0.2% to $53.37.

Libya's two largest ports have been shut due to fresh clashes, cutting output by over 50,000 barrels a day. Meanwhile in Gabon, a majority of oil workers agreed to go on a general strike, notes an ANZ Bank report.

Monday's 2017 annual outlook report from the Paris-based International Energy Agency is also being interpreted as bullish in the short-term by most observers.

The IEA said that oil demand growth is expected to average about 1.2 million barrels a day between now and 2022 and should bring the global surplus down, aided by the current output cuts being implemented by the Organization of the Petroleum Exporting Countries along with some producers outside the cartel.

Olivier Jakob from the Switzerland-based Petromatrix said that the majority of the global demand increases will be met by non-OPEC supply over the next two years according to the IEA.

Speculative financial investors have retreated from the market in the past week, despite oil's recent price stability. Germany's Commerzbank said contracts expecting a rise in oil prices, known as net long positions, in Brent had fallen by 41,000 last week, while in WTI they fell by 37,000.

"In absolute terms, however, 469,300 contracts in Brent and 368,600 contracts in WTI still constitute a very high level," analysts from Commerzbank said.

Meanwhile, Russia's energy minister said Monday that the nation is gradually reducing its oil production in line with an agreement reached with OPEC late last year and should be fully compliant by the end of April.

Russia had agreed to reduce its output by 300,000 barrels a day as part of a broad effort by OPEC and other producers to boost prices, but is behind target on meeting that commitment.

Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 1.1% to $1.69 a gallon while diesel futures gained 0.5% to $1.61.

ICE gasoil for March changed hands at $492.5 a metric ton, up 0.5% from Monday's settlement.

Write to Kevin Baxter at Kevin.Baxter@wsj.com and Biman Mukherji at biman.mukherji@wsj.com

(END) Dow Jones Newswires

March 07, 2017 07:41 ET (12:41 GMT)

Follow this link:
Oil Edges Higher on Libya Supply Disruptions - Morningstar.com