Oil prices steady as investors weigh Libya oilfield restart, Mideast tensions

Environment

A Repsol Oil Operations oil drilling rig pounds into the desert searching through thousands of feet for and oil reserve in El-Sharara, Libya.
Benjamin Lowy | Getty Images

Oil prices were little changed on Monday as the market weighed the reopening of a key oilfield in Libya against ongoing tensions in the Middle East.

The West Texas Intermediate futures contract for February gained 33 cents or 0.45%, to trade at $73.74 a barrel. The Brent contract for March rose 8 cents, or .1%, to trade at $78.64 a barrel.

Libya’s National Oil Corporation resumed full production at the Sharara oilfield on Sunday after protests shut down output for two weeks. Sharara is one of Libya’s largest oilfields with capacity to pump 300,000 barrels per day.

“The sentiment is sourer this morning because the force majeure on Libya’s Sharara oil field has been lifted,” Tamas Varga with PVM Oil Associates wrote in a note. “Investors want to be bullish but tepid data and cautious narrative from policymakers keep them on the backfoot,” he said.

Several U.S. personnel are being evaluated for “traumatic brain injuries” after militants allied with Iran attacked an airbase in Iraq on Saturday with ballistic missiles and rockets, according to U.S. Central Command.

U.S. forces stationed in Iraq and Syria have repeatedly come under attack by Iran-allied militants since Israel’s military operation in Gaza began. Houthi militants, also allied with Iran, have continued their attacks on shipping through the Red Sea despite U.S. airstrikes.

The attacks have stoked worries that the U.S. and Iran are getting drawn into a regional conflict that could disrupt oil supplies.

But traders have been more focused on the supply and demand outlook than geopolitical risk.

The International Energy Agency has a bearish outlook for 2024, projecting that production growth outside OPEC, particularly in the U.S., will rise to about 1.5 million barrels per day, outstripping demand growth of 1.2 million barrels per day.

This is a developing story. Please check back for updates.

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