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Oil rises 3% after disruption at Libya’s oilfield

Oil rises

Brent futures added $2.36, or 3.1%, to settle at $78.25 a barrel and U.S. WTI crude gained $2.32, or 3.3%, to settle at $72.70

Oil prices jumped on Wednesday, settling up nearly 3% after a disruption at Libya’s top oilfield added to concerns that growing tensions in the Middle East could disrupt global oil supplies.

Brent futures added $2.36, or 3.1%, to settle at $78.25 a barrel. U.S. West Texas Intermediate crude gained $2.32, or 3.3%, to settle at $72.70.

Both crude benchmarks settled higher for the first time in five days with the biggest daily percentage gain for West Texas Intermediate since mid November.

Oil is trading higher today, buoyed it would appear by protests at Libya’s biggest oilfield and further attacks in the Red Sea, said Craig Erlam, senior market analyst UK & EMEA, at OANDA.

In OPEC member Libya, protests forced a shutdown of production at the 300,000 bpd Sharara oilfield.

The Organization of the Petroleum Exporting Countries (OPEC) said cooperation and dialogue within the broader OPEC+ oil producer alliance will continue after Angola last month announced it would leave the group.

OPEC+, which includes OPEC and allies such as Russia, said it plans a February 1 meeting to review implementation of its latest oil output cut.

Fed officials seemed increasingly convinced inflation was coming under control, as per the minutes of U.S. central bank’s December meeting.

The Fed is widely expected to keep rates on hold in January. Traders have priced in a 65.7% chance of a 25 bps rate cut in March, shows the CMEGroup’s FedWatch tool.

The American Petroleum Institute (API), an industry group, and the U.S. EIA will release their oil inventory reports one day later than usual because of the New Year holiday with API expected around 4:30 p.m. EST on Wednesday and EIA on Thursday.

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