Crude oil rises to above $100 a barrel amid Russia, Libya supply risks and Texas oil spill
The price of oil fell edged above $100 a barrel Monday as Russia’s annexation of Crimea and Libya’s continued difficulties to stabilize its oil industry worried investors.
Russia is a key supplier of crude oil and natural gas to Europe while Libya’s production of crude, valued by refiners for its high quality, has yet to recover fully since the 2011 civil war which ousted Moammar Gadhafi.
“The supply risks should still lend support to the oil prices, for there is no sign as yet of Libyan production recovering,” analysts at Commerzbank in Frankfurt said in a note to clients. “Furthermore, if the West were to impose additional sanctions on Russia, this could — at least theoretically — curb Russian oil exports and justify a certain price premium.”
By early afternoon in Europe, benchmark U.S. crude for May delivery was up 79 cents at $100.25 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contract rose 56 cents to $99.46.
Brent crude, used to set prices for international varieties of crude, was up 49 cents to $107.41 a barrel
Prices were also underpinned by a Saturday oil spill which closed the Houston Ship Channel. A barge carrying about 900,000 gallons of heavy, tar-like oil collided with a ship in the Texas waterway, spilling about a fifth of its cargo.
“The closure could persist all week, so it may prove supportive for prices, as crude oil deliveries will be hampered,” according to The Kilduff Report edited by Michael Fitzpatrick. “Some 10 percent of the nation’s refining capacity is located at the channel.”
However, soft Chinese economic data kept a lid on prices. The preliminary version of HSBC’s purchasing managers’ index for China showed manufacturing dropped to an eight-month low, while factory output shrank at the fastest pace in 18 months.
Some investors bet the data would spur China to introduce economic stimulus measures to prevent a deeper slowdown in the world’s No. 2 economy.
In other energy futures trading on Nymex:
— Wholesale gasoline added 2.82 cents to $2.9278 a gallon.
— Heating oil rose 1.51 cents to $2.9285 a gallon.
— Natural gas lost 3.7 cents to $4.276 per 1,000 cubic feet.