Oil
rises to $60 per barrel, Libya fire supports
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[December 29, 2014]
By Simon Falush
LONDON (Reuters) - Brent crude oil rose to
$60 per barrel on Monday, supported by concerns about disruption to
exports from Libya, but a global supply glut kept prices nearly 50
percent off their peak for the year.
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A fire at one of Libya's main export terminals has destroyed
800,000 barrels of crude - more than two days of the country's
output - officials said, as clashes escalated between factions
battling for control of the nation.
Libya currently produces around 385,000 barrels per day (bpd) of
crude oil - down from peak production of over 1 million bpd - but
this is a small fraction of the global supply glut, analysts said.
"There's tension in Libya, but liquidity is very thin so not much is
needed to move oil prices," said Hans van Cleef, senior energy
economist at ABN Amro in Amsterdam.
Trade was sparse, with many investors away for the festive period.
Van Cleef added that the overall picture remained bearish, with
traders looking for reasons to sell.
![](http://archives.lincolndailynews.com/2014/Dec/29/images/ads/current/fricke_sda.png) "It's very supply driven, on the demand side, the only impact is
when you see a negative change in data."
Brent crude <LCOc1> was up 65 cents at $60.10 by 1128 GMT after
hitting $60.40 earlier in the day. The benchmark settled down 79
cents in the previous session.
Brent is down 48 percent since hitting the year's high above $115
per barrel in June, weighed down by a decision by OPEC in November
not to cut supply to address the slump in prices and comments from
Saudi Arabia that they are comfortable with lower prices.
It is down 45 percent so far this year, on track for its biggest
fall since 2008, and the second-biggest annual fall since futures
started trading in the 1980s.
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U.S. crude <CLc1> rose 66 cents to $55.39 after closing $1.11 down
in thin trade on Friday. It rose to a peak of $55.74 in early trade
on Monday.
Oil prices also drew support from plans by China and Japan aimed at
supporting their economies, which would help lift demand for
commodities.
The People's Bank of China plans to loosen loan-to-deposit ratios
for banks from next year. China's economy is expected to grow by 7
percent in 2015, slower than the forecast 7.3 percent in 2014, a
government think-tank, the State Information Centre said on Monday.
Japan's government approved on Saturday stimulus spending worth $29
billion to help the country's lagging regions and households with
subsidies, merchandise vouchers and other steps, which it hopes will
boost GDP by 0.7 percent.
(Additional reporting by Keith Wallis in Singapore; editing by Susan
Thomas)
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