NEW YORK: Oil prices climbed as last week’s steep drop attracted buyers, and investors shifted their attention from worries about swelling supplies to concern about ongoing violence in North Africa in the Middle East.
Last week, Brent slid 3.3 percent and the front month settled Friday at $104.84, its lowest since April.
On Monday, oil fell early, then bounced off session lows as escalating violence in key-producing regions supported prices and shifted investor attention to continuing conflicts in Libya and Iraq.
“The market is trying to stabilize after we reached a four-month low last week,” said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
Brent crude rose 52 cents to $105.36 a barrel by 10:36 a.m. EDT (1436 GMT), bouncing off a session low of $104.52.
US crude rose 33 cents to $98.21, after touching an session low of $97.43.
North Sea crude for immediate delivery has been at a discount to futures for the longest period since 2011. The chart formation, called a contango, indicates a well-supplied market.
In Libya, oil output dropped to around 450,000 barrels per day (bpd) from 500,000 bpd last week, but a spokesman for the National Oil Crop said oilfields were still secure despite clashes between rival factions in capital Tripoli.
“Libya is really going down the wrong way. Production has been slowly coming off,” he said. “Libya could quickly return to a much lower production level.”
More than 20 people were killed in clashes around Tripoli on Sunday as battles raged for control of the airport, and fighting led to a huge fire at the city’s fuel depot.
Commerzbank oil analyst Carsten Fritsch said oil prices could rise significantly if the situation deteriorates further.
In Iraq, July oil exports rose to an average of 2.44 million barrels per day (bpd) from 2.42 million bpd in the previous month, despite suspension of shipments from major oilfields around Kirkuk due to fighting in the north.
Kurdish peshmerga forces said they planned a counter-offensive against Islamic State fighters who seized Ain Zalah oilfield and the country’s largest dam on Sunday.
Brent crude climbs past $105 a barrel
