A Repsol Oil Operations oil drilling rig pounds into the desert searching through thousands of feet for and oil reserve in El-Sharara, Libya.
Benjamin Lowy | Getty Images
Oil prices rose on Monday as investors monitored the war in Ukraine and conflict in the Middle East for any potential impact on crude supplies.
The West Texas Intermediate futures contract for February gained $1.01, or 1.38%, to trade at $74.42 a barrel. The Brent contract for March rose 91 cents, or 1.16%, to trade at $79.49 a barrel.
Several U.S. personnel are being evaluated for “traumatic brain injuries” after militants allied with Iran attacked an airbase in Iraq on Saturday with ballistic missiles and rockets, according to U.S. Central Command.
U.S. forces stationed in Iraq and Syria have repeatedly come under attack by Iran-allied militants since Israel’s military operation in Gaza began. Houthi militants, also allied with Iran, have continued their attacks on shipping through the Red Sea, a crucial trade artery, despite U.S. airstrikes.
The attacks have stoked worries that the U.S. and Iran are getting drawn into a regional conflict that could disrupt oil supplies.
Russian energy infrastructure also came under attack over the weekend. Ukrainian drones struck a major fuel processing and export facility near St. Petersburg, a source in Kyiv told the BBC. The Ust-Luga facility processes gas condensate into jet fuel and gasoil among other products.
Libya’s National Oil Corporation, meanwhile, resumed full production at the Sharara oilfield on Sunday after protests shut down output for two weeks. Sharara is one of Libya’s largest oilfields with capacity to pump 300,000 barrels per day.
Traders have generally been more focused on the supply and demand outlook than geopolitical risk.
The International Energy Agency has a bearish forecast for 2024, projecting that production outside OPEC, particularly in the U.S., will rise by about 1.5 million barrels per day, more than covering global demand growth of 1.2 million barrels per day.
OPEC, on the other hand, has presented a stronger outlook with oil demand forecast to grow by 2.2 million barrels per day, while production outside OPEC will grow by 1.3 million barrels per day.
“Investors want to be bullish but tepid data and cautious narrative from policymakers keep them on the backfoot,” Tamas Varga with PVM Oil Associates wrote in a note.
This is a developing story. Please check back for updates.
