Crude settles higher as Libyan outage fans supply jitters

Reuters with
Andrew Burton | Getty Images

Oil futures on both sides of the Atlantic climbed on Wednesday, as support from Libyan supply outages offset forecasts for increases in U.S. stockpiles.

Uncertainty about how soon the U.S. Federal Reserve will begin to scale back its monetary stimulus also prompted traders, who were short U.S. oil, to buy contracts and cover positions. Libyan exports remain disrupted by strikes and protests, and the head of Italian oil company Eni said the situation was getting worse.

Brent for December delivery rose more than $1 higher above $107 per barrel, after settling 59 cents lower on Tuesday. U.S. crude settled up 84 cents at $93.88 per barrel. The contract fell more than $2 a barrel on Tuesday, hitting a four-and-a-half-month low.

Lack of success in weekend talks on Iran's nuclear work reduced the chance of 1 million barrels per day (bpd) of Iranian crude returning soon to the market, supporting Brent.

Forecasts of a rise in U.S. crude stocks limited the rally. Analysts expect a 1 million-barrel increase in Thursday's U.S. Energy Information Administration report. Before then, industry group the American Petroleum Institute releases its own supply report on Wednesday.

For more information on oil prices, please click here.