Oil Prices Hiked Again

Oil prices rose on Friday, and several factors played a significant role in it. US crude stocks went down after Field Marshal Khalifa Haftar stopped oil exports from 5 ports in Libya. He closed a pipeline and two significant fields in the southwest of the country. After receiving instructions from the “General Command” to stop exports, the Libyan National Oil Corporation announced that this could lead to production losses of up to 800 000 barrels per day. This is in addition to the revenue losses of $55 million per day, mentioned in the statement on Saturday.

Analysts at German bank Commerzbank stated they didn’t expect a continued delay in exports from Libya. However, the country is witnessing an escalation of tensions after the failed meeting between the Prime minister of the Libyan government, Fayez el-Sarraj, and the leader of the “Libyan National Army, General Khalifa Haftar. The failure to meet hindered the chance to reach a permanent cease-fire in the country.

China Coronavirus Influence on Oil Prices

Oil prices have been down due to concerns about the spread of coronavirus in China. A new deadly virus has infected the country, which threatened world travel, let to a decline in demand levels, and affected economic growth. The virus has infected more than 800 people in China and killed 25 people. It advanced as far as Japan, Thailand, Singapore, and the US. Still, the disease doesn’t constitute an international emergency yet. The WHO has declared the virus a global health emergency. However, it held back from announcing the epidemic of international concern.

China is the world’s second-largest economy. Any hindrance to the country’s growth can broadly hurt processes across agriculture, materials, and energy. Travel plans are a risk for commodities like steel and copper, that are used in building and infrastructure. Regulations that discourage travel, delay workers’ trips back to their hometown and affect the construction activities, says Sarah Zhao, an analyst at Huatai Futures Co.

Predictions on Crude Prices

According to Reuters, Brent crude futures rose by 0.5%, to $62.35 a barrel. Jeffrey Halley, a senior market analyst of OANDA, says that oil sell-off for the week continued at pace as the fears about the effects on global demand from a virus-induced economic slowdown in Asia still are alive. There is a possibility of the fragility of oil prices.

Analysts at GB Morgan Bank expect the possibility of Brent crude reaching an average price of $67 barrel during the first quarter of the year, with costs approaching $64.50 during 2020.