Crude oil prices started the week on a bullish note, rising in response to events in Libya and Iraq.
Over the weekend, Libya saw oil production plummeted by around 800,000 barrels per day (bpd) after fighters affiliated with rebel leader Khalifa Haftar forced the shutdown of the country’s largest field. Meanwhile, Iraq had to suspend production at one of its own oil fields after security personnel went on strike.
AxiTrader’s chief Asia market strategist Stephen Innes noted that events in Iraq had raised concerns about the possibility that production might come to a halt elsewhere. “This outage comes amid rising fears that general unrest in Iraq, [OPEC’s] number two producer, could intensify and trigger a more widespread supply disruption even more so if the protesters set sight on the oil fields,” he said.
Innes also suggested, though, that production stoppages might not lead to a dramatic rise in world oil prices. Traders’ concerns about geopolitical risk are likely to fade relatively quickly, he asserted.