By Matt Egan, CNN Business 4/9/2019
Venezuela is in chaos. Iran is grappling with US sanctions. And now there's a surge of violence in Libya. Trouble in these three OPEC nations has helped send US oil prices climbing back above $64 a barrel.
The latest OPEC turmoil amplifies the supply constraints imposed by the cartel's kingpin. Saudi Arabia has slashed production as well as exports to the United States in a bid to engineer higher prices and balance its budget.
Despite record-shattering US oil production, US oil prices have spiked 50% since plummeting to $42.53 a barrel on Christmas Eve. And gasoline prices are creeping higher just as the American economy grapples with a slowdown.
"The oil supply story is bullish," said Shin Kim, head of supply and production at S&P Global Platts. "The potential for an escalation of the conflict in Libya has renewed significant risks to oil production."
US oil prices hit a five-month high of $64.79 a barrel on Tuesday morning before retreating.
"I wouldn't be surprised to see oil prices hit $70 before mid-summer," said Ryan Fitzmaurice, energy strategist at Rabobank.
Brent crude, the global benchmark, is already above $71 a barrel for the first time since mid-November.
Clashes in Libya in recent days raise the risk that the war-torn country's 1.3 million barrels of daily oil production will be imperiled. Libya's UN-backed government said it repelled an attack by rebels over the weekend after briefly losing control of Tripoli's airport.
"OPEC's perennial 'problem child' producer" is facing a "grave security crisis," Helima Croft, global head of commodity strategy at RBC Capital Markets, wrote in a note to clients.
The United States military pulled a contingent of trips from Libya over the weekend, citing the nation's "increasingly complex and unpredictable" security situation.
More:
https://edition.cnn.com/2019/04/09/investing/oil-prices-opec-libya-venezuela/index.html
