Crude rose by more than 1 percent on Monday, boosted by expectations for rising demand from positive European economic data, while supplies remained cut off from Libya.
The closure of the Libyan oil ports is preventing export of several hundred thousand barrels per day (bpd) of high quality, light crude.Libyan port blockages, along with strikes by oil workers, civil servants, tribesmen and other protesters at oilfields across the desert country, have slashed its oil exports to around 110,000 bpd from more than 1 million in July.
Analysts worry that Libya is sliding into chaos as the government struggles to rein in militias and tribesmen who helped topple Muammar Gaddafi in 2011 but kept their weapons and control parts of the OPEC-member country.
Investors also awaited a U.S. Federal Reserve decision on how soon to end monetary stimulus, which has helped drive investment in global commodities. The U.S. central bank meets on Tuesday and Wednesday to discuss policy, and opinion is divided on whether it will taper its stimulus efforts this week or wait for early next year. A cut in its stimulus would boost the dollar, weighing on most commodities, including oil.
Brent crude rose by nearly $2 per barrel, boosting its premium to U.S. oil to a one-week high. U.S. oil settled up 88 cents at $97.48, with its rally boosted by a spate of constructive U.S. data that presaged the Fed meeting.
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