Oil headed for its longest run of gains this year as Libya’s biggest oil field suffered another outage while Russia signaled it’s weighing an extension of OPEC-led production cuts.
Futures gained for a fifth day in New York after advancing 3.2 percent last week following a U.S. military strike on Syria. Libya’s Sharara field halted just one week after reopening, with the National Oil Corp. declaring force majeure on exports, according to a copy of its decree obtained by Bloomberg. In Russia, Energy Minister Alexander Novak said Friday his ministry had been in talks with oil companies regarding the need to prolong the six-month deal with OPEC.
Support from some members of the Organization of Petroleum Exporting Countries to extend the curbs has sparked a rally above $50 a barrel. The cuts have stabilized the market and Russia will continue to watch inventory levels, but it’s too early to decide whether the pact should be prolonged, Novak said. In OPEC nation Libya — exempt from the agreement — Sharara had been pumping 200,000 barrels a day before the latest disruption, according to the NOC. A week earlier, exports were interrupted by a pipeline halt.
“Libyan production is back to square one,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.
West Texas Intermediate for May delivery rose as much as 58 cents to $52.82 a barrel on the New York Mercantile Exchange and was at $52.75 as of 12:48 p.m. London time. Total volume traded was about 5 percent above the 100-day average. The contract gained 54 cents to $52.24 on Friday.
Brent for June settlement climbed as much as 63 cents, or 1.1 percent, to $55.87 a barrel on the London-based ICE Futures Europe exchange after advancing 35 cents on Friday. The global benchmark crude was at a premium of $2.65 to June WTI.