June 26 (UPI) — Concerns about global trade tensions were balanced against national security concerns for OPEC-member Libya to lift crude oil prices higher early Tuesday.
Libya’s National Oil Corp. said Tuesday there were concerns about oil exports with military action on ports. Derek Brower, the head of research at risk consultancy Petroleum Policy Intelligence, said military action was a “shocking move” that could divide the country.
“It could also lead to a prolonged shut down of the bulk of Libya’s oil output,” he told UPI.
Libya fractured along competing political lines in the wake of civil war. With infighting continuing, Libya’s NOC said production was down about a quarter from its latest average of around 955,000 barrels per day.
Security challenges for the OPEC member follow the conclusion of weekend meetings for the producer group that brought pledges of more oil on the market in the second half of the year. That lack of spare capacity to respond to supply-side shocks, however, puts the overall market at risk.
The price for Brent crude oil was up 0.54 percent as of 9:23 a.m. EDT to $74.95 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.5 percent to $68.42 per barrel.
Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter, there are lingering concerns about an imbalance in the market in the second half of the year.
“Even the most diehard oil bears are now starting to realize that the math of meeting supply with demand just does not add up,” he said.
U.S. Energy Secretary Rick Perry is expected to meet this week with his Russian counterpart, Alexander Novak. Flynn said he expects Perry to ask the Russian energy minister to open the spigot even more.
Russia is the largest non-member state contributor to OPEC’s production agreement.
Elsewhere, the broader market may react midway through the trading morning as traders digest the latest figures on U.S. home prices in the S&P CoreLogic Case-Shiller index. The Conference Board at 10 a.m. EDT releases its latest figures on consumer confidence.
Lynn Franco, the director of economic indicators at The Conference Board, said last month the figures showed confidence was at “historically strong levels.”
On trade issues, European Trade Commissioner Cecilia Malmström said the European Union was working to ensure global trade doors remained open in an era of increased protectionism.
“Ensuring that our companies have access to foreign markets is at the heart of our trade policy,” she said in a statement.