ISLAMABAD
Crude oil prices extended gains of the previous session on Thursday on the back of supply concerns after reports of disruption in Libya’s largest oilfield as well as the geopolitical tensions in the Middle East.
As of 1115 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.63 (+0.81 percent) to reach $78.88 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.72 (+0.99 percent) to $73.42 a barrel. Brent and WTI ended the last week lower by 3.93 percent and 2.6 percent respectively. Crude futures recorded their biggest annual drop since 2020 last year at a time of record US oil production and a slowdown in major economies. On an annual basis, Brent ended 2023 more than 10 percent lower, while WTI dropped by nearly 11 percent.
The prices of Russian Sokol, Arab Light and Opec Basket remained unchanged at 73.36, $82.03 and $80.84 a barrel respectively.
Oil traded higher amid protests at Libya’s largest oilfield and further attacks in the Red Sea. Both could threaten output if intensified but may not pose a substantial upside risk to prices otherwise.
Production at the Sharara field has been completely shut down due to workers’ protest. The oilfield in southern Libya can produce up to 300,000 barrels per day. Meanwhile, continuing attacks by Yemen’s Houthis on cargo ships in the Red Sea in retaliation for Israel’s bombardment of Gaza have escalated concerns about supply disruption.
The Bab El Mandeb, on the southern edge of the Red Sea, is a route for oil tankers and cargo ships sailing between the Arabian Gulf and Asia, as well as to Europe through the Suez Canal. About 12 percent of the world’s seaborne oil trade and 8 percent of liquefied natural gas passes through the strait.
Crude futures recorded their biggest annual drop since 2020 last year at a time of record US oil production and a slowdown in major economies.
