Oil Gains on Supply Concerns, Higher Equities
By Stephanie Yang and Sarah McFarlane
Oil prices advanced on Monday, boosted by reports of supply disruptions in Libya and increased risk appetite among investors.
Light, sweet crude for April delivery rose $1.32, or 2.2%, to $62.57 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained $1.17, or 1.8%, to $65.54 a barrel.
Crude prices rebounded from earlier losses throughout the trading session as U.S. equities also climbed. With a lack of fresh supply and demand data in the market, traders said oil has taken cues from broader markets in recent weeks, such as stocks and currencies.
"For the most part they all seem to be joined at the hip right now," said Ric Navy, senior vice president for energy futures at R.J. O'Brien & Associates.
The Dow Jones Industrial Average rose 1.4% and the S&P 500 gained 1.1% on Monday, as strong economic data outweighed fears over how new import tariffs could influence U.S. trade.
"That said to me, 'OK, now we can start buying commodities again,'" Mr. Navy said.
The oil market also received support from reports of supply disruptions in Libya over the weekend.
"This production is very wobbly," said Giovanni Staunovo, commodities analyst at UBS Wealth Management, referring to repeated disruptions, adding that the political situation in Libya remained unstable.
The outages compounded supply issues already seen from major producer Venezuela as the country struggles with an economic crisis. On Thursday, Venezuela's election agency said a presidential vote planned for April 22 had been delayed by a month, adding to political and economic uncertainty.
On Monday, The International Energy Agency forecast the U.S. would become the world's top crude producer by 2023, with production reaching a record of 12.1 million barrels a day, about 2 million barrels a day higher than 2018 production.
"The current production outages merely hide the fact that the oil market is amply supplied thanks to the sharply rising U.S. oil production," Commerzbank said in a daily note.
The IEA report also said oil demand is unlikely to peak in the next five years, and foresees demand exceeding 100 million barrels a day for the first time next year.
Gasoline futures gained 1.8% to $1.9349 a gallon, and diesel futures increased 0.9% to $1.8967 a gallon.
Write to Stephanie Yang at email@example.com and Sarah McFarlane at firstname.lastname@example.org
(END) Dow Jones Newswires
March 05, 2018 16:56 ET (21:56 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.