Oil prices rose sharply this week amid fighting in Libya, where the coalition decided to intervene after a ceasefire declared by Muammar Gaddafi quickly ended. The operation has so far been effective in destroying Gaddafi’s air force and shifting momentum in the civil war back to the rebels, which have just taken over an important town in the eastern part of the country.
However, it is unclear when and how the crisis will end and when the country will be able to resume oil exports.
Before the civil war erupted last month, Libya accounted for roughly two percent of global oil production. Saudi Arabia and other OPEC members decided to raise output to make up for the shortfall caused by the unrest.
Wednesday’s inventories report from the US Department of Energy put more pressure on crude oil futures, showing a larger than expected gain of 2.1 million barrels in US crude stockpiles. The negative impact from the inventories data was offset by Friday’s upward revision of Q4 US GDP growth from 2.8 percent to 3.1 percent.
US light, sweet crude for May delivery, currently the most active contract on the New York Mercantile Exchange (NYMEX), last traded at US$105.40/barrel, while June crude stood at US$105.94/barrel.
May Brent crude reached US$116.02/barrel on the ICE Exchange.
Oil & gas stocks were on the rise this week. BP (LON:BP) rose from 462 pence to 483 pence, fellow supermajor Shell (LON:RDSB) advanced from 2,143 pence to 2,258 pence.
BG Group (LON:BG) climbed from 1,499 pence to 1,533 pence, Cairn Energy (LON:CNE) surged from 423 pence to 447 pence and Tullow Oil (LON:TLW) rose from 1,362 pence to 1,415 pence.