Brent Prices Strengthen as Shutdowns in Libya Continue

Brent crude oil reached above $109 on Tuesday morning as supply concerns took the spotlight. The commodity traded at $109.60 at 9:00 GMT on Tuesday as investors looked to the Middle East and Africa for more information on growing tension that has been cutting into crude supply. After reopening its largest oilfields, Libyan oil production has again been cut as protests continued to force closures at several export terminals. CNBC reported that the nation's two largest crude export terminals were shut down only hours after they had reopened on Monday. Libya's Deputy Oil Minister Omar Shakmak reassured markets that workers and local authorities were working to come to an agreement to end the strike. According to Shakmak, the export terminals in question could reopen as early as Thursday. However, gains from uncertainty in oil rich African and Middle Eastern nations are being mitigated as investors cautiously look to the US for clues about when the US Federal Reserve will begin to pull back on its stimulus spending. This week, the US is set to release data for retail sales, consumer prices, housing starts and industrial production; all of which will play into the Fed's decision of whether or not to cut back on its $85 billion per month bond buying plan. While a cut to the Fed's stimulus will initially mean a drop in commodity prices, it could add strength to crude prices as well. The decision to cut stimulus spending means the US has a positive economic outlook which in turn indicates that demand in the number one oil consuming nation will increase as well.