Brent Strong On US Stock Draw

Brent crude oil prices climbed as problems in Libya continued and US crude inventory data showed that the nation’s stocks fell last week. The commodity traded at $109.82 at 6:35 GMT on Wednesday morning as investors awaited Energy Information Administration data, due out later in the day.

Data from the American Petroleum Institute showed that US crude inventories fell by 10.3 million barrels last week as the nation’s refineries boosted output. With the summer driving season fast approaching, most analysts expect to see a steady decline in US stocks. Now investors are waiting for confirmation of last week’s draw from the EIA’s crude inventory report.

Brent also gained support from reports of more fighting in Libya, proving that the crisis is quickly slipping out of the government’s control. CNBC reported that new fighting had broken out in Tripoli on Wednesday morning. The reports of gunfire and explosions in the nation’s capital came just days after armed rebels stormed parliament and demanded its closure.

Earlier in the month, the Libyan government said it was working to reopen the nation’s oilfields as it claimed that protests were over. However, most of Libya’s major oilfields remain closed and with new fighting, many expect to see conditions worsen. The western ports El Feel and El Shahara are still shut down and Libyan national crude output has fallen to 210,000 barrels per day.

Despite the escalating violence, many analysts say Brent isn’t expected to rise much higher on the OPEC nation’s problems, since geopolitical tensions have already been priced in.