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Oil near 2015 high above US$66 after Libya port shuts

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Brent crude oil steadied above US$66 a barrel on Tuesday, just below its 2015 high, after protesters shut down the eastern Libyan oil port of Zueitina, hampering exports.

[LONDON] Brent crude oil steadied above US$66 a barrel on Tuesday, just below its 2015 high, after protesters shut down the eastern Libyan oil port of Zueitina, hampering exports.

Zueitina was one of the few Libyan ports still exporting oil as many others have closed due to fighting or disruptions at oilfields since the ousting of former dictator Muammar Gaddafi.

Libyan oil output is now less than 500,000 barrels per day (bpd), officials say, a third of what Libya pumped before 2010.

A strong dollar also weighed on oil, making the commodity more expensive for holders of other currencies.

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Brent crude oil was down 5 cents at $$66.40 a barrel by 0800 GMT, after touching a 2015 high of $$67.10 on Monday.

US crude oil was down 10 cents to US$58.83 a barrel. "Oil is taking a breather after the latest rally," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. "Momentum is key here," Fritsch added. "The rally is feeding itself with a lot of money looking for buying opportunities." Hedge funds and other money managers raised their bets on rising Brent prices for a fifth week in a row to a new record, data showed on Monday, pushing net long positions to their highest since official exchange records began in 2011.

The rally has led banks to raise forecasts for oil prices for the rest of the year. Societe Generale last week raised its 2015 average Brent crude forecast to US$59.54 a barrel and its WTI forecast to US$53.62.

Bank of America Merrill Lynch analyst have followed suit: "The market seems to have found a spot price low," they said in a note to clients.

Civil war in Yemen has kept the oil market on edge, underpinning prices due to the risk of disruption to oil supplies from the country's northern neighbour, Saudi Arabia, or other Middle East Gulf producers.

The Saudi foreign minister said on Monday the Saudi-led Arab alliance bombing Houthi fighters in Yemen might call a truce in some areas to allow humanitarian supplies in.

Investors awaited data on US commercial crude oil stocks.

A Reuters poll on Monday said commercial crude stocks may have risen by nearly 2 million barrels last week, building for a record 17th straight week.

The US Energy Information Administration will publish it official report on US oil inventories on Wednesday.

REUTERS

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