London: Brent crude oil rose to around $110 a barrel on Monday, defying declines seen in some other risk assets on news of further supply losses in Africa and expectations of revived oil demand growth.
Libyan oil output plunged further over the weekend, falling to 230,000 barrels per day (bpd) on Sunday after a new protest shut the El Sharara field.
Before nationwide protests started in the middle of last year, Libyan oil production was closer to 1.4 million bpd.
“As long as the Libyan security situation is unstable, global oil prices will be buoyed,” said Michael Poulsen, analyst at Danish consultancy Global Risk Management.
Brent crude was up 15 cents to $110 a barrel by 0900 GMT (1pm UAE), after settling higher for a second straight week.
United States oil rose 25 cents to $102.45 after climbing for the sixth week in its longest winning streak in more than a year.
Oil markets also found support from a fairly upbeat meeting of the world’s top economies in Sydney, which announced a target of generating more than $2 trillion in additional output over five years while creating millions of new jobs.
Oil demand tracks global economic growth closely.
“The outlook is momentarily positive for energy prices,” said Michael McCarthy, chief strategist at CMC Markets. “It is more the demand side of the equation. Reasonable global growth in oil demand is expected.”
Investors are also keeping an eye on global political tensions and the potential for further disruption to oil exports.
In South Sudan, the capital of the main oil-producing Upper Nile region, Malakal, remains divided between the army and rebels, government officials say.
Officials say South Sudan’s oil production had fallen to about 170,000 bpd even before the rebel strike on Malakal, a drop of around a third since the fighting erupted in December.
Money managers raised their net long US crude futures and options positions to a record in the week to February 18, US Commodity Futures Trading Commission data showed.
Big hedge funds and other speculative traders boosted their combined futures and options position on the New York and London exchanges by 29,113 contracts to 393,248.