Oil prices steadied on Thursday after sharp losses the previous session as the International Energy Agency (IEA) said the world’s oil supply cushion “might be stretched to the limit” due to production losses، according to Reuters.
Benchmark Brent crude oil LCOc1 rose $1.70، or more than 2.3 percent، to a high of $75.10 a barrel before losing almost all its gains to trade at $73.60، up 20 cents، by 1340 GMT. On Wednesday، Brent had slumped $5.46 or 6.9 percent.
U.S. light crude CLc1 fell 30 cents to $70.08 a barrel، after losing 5 percent the previous session.
“Warnings from the IEA of a potential spare capacity crunch are helping the energy complex... following yesterday’s bloodbath،” said Stephen Brennock، analyst at London brokerage PVM Oil Associates.
An announcement by Libya’s National Oil Corp (NOC) that four oil export terminals were reopening، ending a standoff that had shut down most of Libya’s oil output، was a key catalyst for a dramatic sell-off on Wednesday، analysts said.
The reopening will allow the return of up to 850،000 barrels per day of high-quality crude to international markets.
Two Libyan oilfields will reopen، NOC and industry sources said on Thursday، easing worries over supply from the key OPEC exporter that have helped prop up crude prices in recent weeks.
But supply concerns were highlighted again by the IEA، which reminded investors of the large number of output disruptions keeping pressure on global oil supply.
“Rising production from Middle East Gulf countries and Russia، welcome though it is، comes at the expense of the world’s spare capacity cushion، which might be stretched to the limit،” the Paris-based agency said in its monthly report.