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Update: Oil rises to US$60 per barrel, Libya fire supports
[LONDON] Brent crude oil rose to USUS$60 per barrel on Monday, supported by concerns about disruption to output from Libya, but a global supply glut kept prices nearly 50 per cent off their peak for the year.
Libya is producing a scant 128,000 barrels of oil a day from fields connected to the far eastern port of Hariga, an oil official said, as fighting kept its largest ports, Es Sider and Ras Lanuf, shut.
Output from the Opec member nation has struggled with port blockades and protests, slashing output from the 1.6 million barrels a day it produced prior to the 2011 ousting of leader Muammar Gaddafi.
A fire sparked by a rocket attack last week on oil storage tanks at the port of Es Sider marked an escalation in damage to the country's oil infrastructure.
"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 holidays.
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 84 cents at US$60.29 by 1247 GMT after hitting US$60.40. The benchmark shed 79 cents in the previous session.
Brent is down around 46 per cent since a year high above US$115 per barrel hit in June. It has been weighed down by a decision taken by OPEC in November not to cut supply to address the slump in prices and comments since from Saudi Arabia expressing comfort with lower prices.
Oil is on track for its biggest fall since 2008 and the second-biggest annual fall since futures started trading in the 1980s.
US crude rose 81 cents to US$55.54 after closing US$1.11 down in thin trade on Friday. It rose to a peak of US$55.74 early on Monday.
Oil prices also drew support from plans by China and Japan aimed at supporting their economies, which would help lift demand.
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, government think-tank State Information Centre said.
Japan's government on Saturday approved 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.