(Bloomberg) — Oil prices have stabilized after a three-day rally, with the threat of a supply freeze from Libya weighing on the still uncertain demand forecast.
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Brent oil traded above $81 a barrel, having gained about 7 percent since Wednesday, its biggest three-day winning streak since April last year. West Texas Intermediate was at nearly $77. The government in eastern Libya imposed force majeure – a legal clause that allows a producer to miss deliveries – on all oil fields, terminals and facilities as it battles its Tripoli rival for control of the OPEC member’s central bank and oil reserves.
Crude oil prices are back on the rise this year, boosted by signs of an imminent rate cut by the US Federal Reserve, geopolitical tensions and OPEC+ supply discipline. This was partially offset by weak demand prospects, particularly in the largest importer, China.
The threat to Libyan exports followed an exchange of fire between Israel and Iran-backed Hezbollah over the weekend, reigniting fears that it could impact physical exports from the Middle East. Although both parties said they had ended their military operations for now, the market is still waiting for signs of further fallout from the Gaza war.
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