Oil prices rose during Monday’s trading, after supply disruptions and political instability in the Middle East, specifically in Libya, after two large oil production bases began to cut production in preparation for closure.
As of 07:52 GMT, Brent crude reached $65.44 per barrel, snapping early gains when it hit a peak at $65.85, the highest level since January 9.
Brent pries opened on an upside gap at $65.61, compared to Friday’s closing at $65.06.
West Texas Intermediate (WTI) crude futures traded lower at $58.99 per barrel, but still higher from Friday’s closing of $58.76.
Libya’s National Oil Corporation (NOC) said in a statement on Sunday that Libya's largest oil field and another major field in the southwest of the country began to cut production on after forces loyal to military commander Khalifa Haftar shut down a pipeline linking the two fields to the coast.
According to spokesman for Libya’s National Oil Corporation remarks on Sunday, oil production will fall to 72,000 barrels per day (bpd) in just a few days if oil facilities continue to close.
Libya's production was more than 1.2 million barrels per day before the army closed oil ports and fields ahead of the Berlin International Peace Summit in Libya.
The suspension of oil exports at Libyan ports is expected to reduce the country's production by about 800,000 barrels per day, forcing the Libyan National Oil Corporation to declare a state of force in delivery contracts.
It is worth mentioning that oil prices have been taking advantage of geopolitical tensions in the Middle East, as crude oil set a peak at $65.63 on January 5, which is the highest since April 2019.
Asian shares finished higher, where the MSCI traded near its highest level in 20 months, trailing strong gains on Wall Street on Friday.
China’s CSI 300 index surged 0.75 percent to finish at 4,185.83 points. Australia’s S&P/ASX 200 ascended 0.22 percent at 7,079.52, while Hong Kong Hang Seng index slid 0.81 percent to reach 28,821.
In Japan, Nikkei225 was up by 0.18 percent to close at 24,083.51 after reaching its highest level since September 2018 during the session.
Meanwhile, the dollar
index, which measures the performance of major six currencies against the U.S
dollar, rose by 0.03 to 97.63.