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[LONDON] Brent crude oil rose to US$60 per barrel on Monday, supported by concern about disruption to exports from Libya, but a global supply glut kept prices nearly 50 per cent off their peak for the year.
A fire caused by fighting at one of Libya's main export terminals has destroyed 800,000 barrels of crude - more than two days of the country's output, officials said, amid clashes between factions battling for control of the nation. .
Libya currently produces around 385,000 barrels per day of crude oil - down from peak production of over 1 million bpd - but this is a small fraction of the global supply overhang, analysts said. "There's tension in Libya, but liquidity is very thin so not much is needed to move oil prices," said Hans van Cleef, senior energy Economist at ABN Amro in Amsterdam.
Trade was sparse, with many investors away for the festive period.
Van Cleef added that the overall picture remained bearish, with traders looking for reasons to sell. "It's very supply driven, on the demand side, the only impact is when you see a negative change in data." Brent crude was up 67 cents at US$60.12 by 0902 GMT after hitting US$60.40 earlier in the day. The benchmark settled down 79 cents in the previous session.
Brent is down 48 per cent since hitting the year's high above US$115 per barrel in June, weighed down by a decision by OPEC in November not to cut supply to address a slump in prices and comments from Saudi Arabia that they are comfortable with lower prices.
It is down 45 per cent so far this year, on track for its biggest fall since 2008, and the second-biggest annual fall since futures started trading in the 1980s.
US crude rose 82 cents to US$55.55 after closing US$1.11 down in thin trade on Friday. It rose to a peak of US$55.74 in early trade on Monday.
Oil prices also drew support from plans by China and Japan aimed at supporting their economies, which would help lift demand for commodities.
The People's Bank of China plans to loosen loan-to-deposit ratios for banks from next year. China's economy is expected to grow by 7 per cent in 2015, slower than the forecast 7.3 per cent in 2014, a government think-tank, the State Information Centre said on Monday.
Japan's government approved on Saturday stimulus spending worth US$29 billion to help the country's lagging regions and households with subsidies, merchandise vouchers and other steps, which it hopes will boost GDP by 0.7 per cent.