West Texas Intermediate rose toward US$94 a barrel, reversing an earlier decline, after gaining 2.5 per cent last week. In Libya, clashes between militias in the capital left at least 23 dead, sparking fears of further upheaval in the OPEC nation. While Libya’s output so far remains stable, investors are watching for signs that the violence may again put oil shipments at risk just as Europe reels from an energy crisis.
Crude is on course for a third straight monthly drop on concern global growth will slow as central banks tighten policy aggressively, hurting consumption. Federal Reserve Chair Jerome Powell has warned of the need for higher rates, while a top European Central Bank official said that there was “little choice” but to press on even if the region’s economy dipped into recession.
“There are many risks that could potentially lead to supply disruptions,” including the situation in Libya and a longer timeframe for the Iran nuclear talks, said Giovanni Staunovo, a commodity analyst at UBS Group AG. Investors and traders are also focused on “what OPEC might do next week and ongoing substitution of oil for natural gas.”
Brent for October settlement climbed 0.7 per cent to US$101.65 a barrel on the ICE Futures Europe exchange.