World oil prices rebound from recent fallsMonday 06 January 2014 08.25
Brent crude edged over $107 a barrel today, bouncing back from its biggest weekly fall in six months, but the restart of a key Libyan oilfield could limit gains.
Crude supply from Libya is set to more than double from current levels after production at the El Sharara field resumed over the weekend as protesters ended a two-month blockade.
Brent crude for February delivery had climbed 30 cents to $107.19 a barrel in early trade, after settling lower in the previous four sessions, partly on expectations of rising Libyan exports.
US crude gained 18 cents to $94.14 a barrel. The contract lost $1.48 a barrel on Friday and posted its biggest weekly drop since June 2012.
The resumption of Libya's El Sharara field could lift the country's production to 600,000 barrels per day (bpd). Output from the OPEC-member had fallen to 250,000 bpd from 1.4 million bpd in July, boosting international oil prices.
The restart of the field was a rare success for Prime Minister Ali Zeidan, who has been trying to end a wave of oilfield and port blockages. But the situation remains volatile, with a different set of protesters now blocking an oil pipeline in the west that runs to the Mellitah export port.
Meanwhile, concerns over slowing growth in China and a strengthening dollar also countered gains in oil and other commodities.
Growth in China's services sector fell to a four-month low in December as business expectations dropped, a government survey showed today, adding to evidence that the second largest economy lost steam at the close of 2013.
The dollar hovered near a four-week high, supported by an upbeat outlook on the US economy by Federal Reserve Chairman Ben Bernanke that fanned expectations of faster stimulus reduction by the central bank. A stronger greenback makes it more expensive for importers to purchase dollar-denominated oil, weighing on demand.
South Sudan's oil production remained a concern even after the government and rebels last week agreed to peace talks. Three weeks of fighting have left over 1,000 people dead and disrupted oil supply from the African country.
The talks could face delays, after gunfire erupted on Sunday in the country's capital.
An official in neighbouring Sudan, through which land-locked South Sudan pumps its oil for export, said last week 239,000 barrels a day of crude were being shipped though its pipeline.