Oil edges further above $60 as Libyan output slumps

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SHAFAQNA – Oil edged further above $60 a barrel on Friday as unrest in Libya cut supplies, offsetting a growing supply glut in top consumer the United States and weak imports by Japan.

Fighting in Libya has cut output there to 352,000 barrels a day, a state oil company spokesman said on Thursday, or about half November’s average. This countered the U.S. Department of Energy’s (DOE) report showing a big stockbuild.

“Libya is a supportive factor,” said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland. “The fighting in Libya is starting to be more and more about a battle for the oil resources and this will not end well.”

Brent crude was at $60.50 at 1230 GMT, up 26 cents, while U.S. crude added 32 cents to $56.16 in thin trade as many countries are still on Christmas holiday.

In Libya, a rocket set a storage tank at the country’s biggest export terminal, Es Sider, on fire as armed factions allied to competing governments fought for control, officials from both sides said on Thursday.

On Friday, officials said the blaze had spread to two more tanks.

The market had come under pressure from Wednesday’s DOE report, which showed a 7.3 million-barrel rise in crude inventories to their highest December level on record. Analysts had expected a seasonal decline.

Nonetheless, Brent still managed to close above $60 on Wednesday, validating that psychological support level as the bottom of Brent’s trading range of $60 to $70 for now, Jakob said.

Crude imports by Japan, the world’s fourth-biggest oil buyer, dropped 17.3 percent in November from a year earlier to 14.68 million kilolitres (3.08 million bpd), government data showed on Thursday.

However, there is not enough downward pressure to keep prices down, Singapore-based Phillip Futures said in a note.

“Prices seem adamant on staying above support levels and it seems they will hold for this festive season,” it said. “We continue to attribute this to the short-covering at the end of the year.”

Source : Reuters.com

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