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Libyan Fire Gives Crude Oil A Lift

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Libyan Fire Gives Crude Oil A Lift

Oil prices began the final week of the year on a bright note, climbing to $62.10 by 8:40 GMT on Monday morning. The commodity was boosted by worries about supply interruptions in Libya, where fighting erupted over the weekend.

The nation has been plagued by fighting between national forces and protest groups over the past year, all looking for more control. Reuters reported that violent clashes caused a fire at one of Libya’s largest export terminals, creating concern about stability in the OPEC producer. The fire destroyed 800,000 barrels of crude, which amounts to over two days worth of the nation’s output.

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Crude prices also found support from news that both Japan and China are expected to see another round of stimulus from their central banks. In China, the People’s Bank of China is planning to give banks more incentive to lend by loosening its loan-to-deposit requirements. In Japan, the region’s government is set to spend $29 billion on subsidies designed to help boost spending and raise the nation’s GDP by around 0.7 percent.

Brent prices are expected to remain low for the rest of the year as the commodity is still under pressure from the growing supply glut. Most see the commodity remaining above $60 through the end of 2014 with few catalysts for growth seen on the horizon. As for 2015, many expect that crude prices will continue to struggle as they are unlikely to make any major jumps without a change to their declining fundamentals.

Posted-In: News Commodities Forex Global Markets Best of Benzinga

 

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