Oil prices rose more than $1 per barrel on Tuesday due to growing supply outages, with Norway shutting one oilfield as hundreds of workers began a strike and Libya saying its production more than halved in recent months. The disruptions add to supply worries around the world. Venezuela's production has collapsed due to a lack of investment and Iranian exports have suffered due to U.S sanctions. OPEC has little capacity to fill the gap as demand for oil quickens. Benchmark Brent oil futures rose by 96 cents, or 1.2 percent, to $79.03 per barrel by 1058 GMT. They earlier hit an intraday high of $79.29. Brent gained 1.2 percent on Monday.
Oil prices fell on Friday and were set for a second straight week of decline after Libyan ports reopened and on the view that Iran might still export some crude despite U.S. sanctions.
Brent crude LCOc1 was down 36 cents, or 0.5 percent, at $74.09 per barrel by 1125 GMT, having fallen earlier by 1.3 percent. It was heading for a weekly fall of around 4 percent.
U.S. benchmark West Texas Intermediate crude CLc1 lost 12 cents to $70.22 and was also set for a weekly decline of around 4 percent.
Oil approached $80 in late June and early July due to Libyan and Venezuelan supply disruptions and fears the United States would press all buyers of Iranian oil to cut imports to zero from November.
But prices weakened in recent days as OPEC member Libya reopened its ports in the east and U.S. Secretary of State Mike Pompeo said Washington would consider granting waivers to some of Iran’s crude buyers.
Prices also slid amid broader market fears that a U.S.-China trade dispute could hit global economic growth.
“While the oil market could not escape the mounting trade tensions and souring sentiment in financial markets, the sell-off was more about signs of rising supplies,” Julius Baer analyst Carsten Menke said.
“If Iran was blocked from the market, we believe oil prices would rise toward $90 per barrel, which would cause significant fuel inflation, weigh on consumer and business sentiment and eventually hurt the economy,” he added.
The International Energy Agency (IEA) warned on Thursday that the world was short of spare supply capacity and hence any new disruption could further elevate oil prices.