NEW YORK: Oil prices touched 2½-year highs in light volume on Tuesday, boosted by an explosion on a crude pipeline in Libya and voluntary Opec-led supply cuts.Libya has lost around 90,000 bpd of crude oil from a blast on a pipeline feeding Es Sider port, a Libyan oil source said, adding that NOC was still assessing the damage.A Libyan military source said earlier that armed men had planted explosives at the pipeline.The country’s output had been recovering in recent months after being held down for years by conflict and unrest.Brent crude, the international benchmark for oil prices, rose US$1.51, or 2.31%, to US$66.76 a barrel by 11:40am (12:40am Malaysian time). Prices hit a session high of US$66.83 a barrel, the highest since late May 2015.US crude climbed US$1.29, or 2.21%, to US$59.76 a barrel after touching a session high of US$59.86, the highest since late June 2015.The impending restart of a key North Sea pipeline, Forties, limited the rally. The pipeline is being tested after repairs and full flows should resume in early January, its operator said on Monday.“Keep in mind that the field and pipeline are old and it may have issues and it’s probably why the market isn’t selling off,” said Scott Shelton, broker at ICAP in Durham, North Carolina.Trading activity was thin because of the Christmas holiday in many countries. Just 50,000 contracts of front-month Brent crude futures changed hands on Tuesday, well below the typical daily average of more than 250,000 contracts.Brent has risen 17% while US crude has rallied about 11% in 2017. Global oil inventories have decreased to an acceptable level, he added.That is earlier than predicted in Opec’s latest official forecast, which calls for a balanced market by late 2018.US shipments to China, one of the biggest oil consumers in the world, have benefited from the Opec-led output cuts.

Source: The Star December 26, 2017 18:00 UTC