Oil prices rise following attacks on Libyan oil terminals

US benchmark West Texas Intermediate for February delivery rose 10 cents to $55.94 in afternoon trade, while Brent for February gained nine cents to $60.33.

Trading volumes in Asia were thinner than usual with major regional financial markets including Hong Kong and Australia closed on Friday. US and European stock markets will also be shut for the Boxing Day holiday.

Analysts said some bearish dealers were taking profits on short positions, pushing prices up.

The attack in Libya’s oil-rich region on Thursday, saw militiamen belonging to the Fajr Libya, or Libya Dawn, target Al-Sidra port by firing rockets from speedboats, setting an oil tank on fire, security forces said.

Soldiers damaged three of the vessels before clashes in which the militants were eventually repelled. Witnesses said the attack was launched overnight, and reported seeing smoke from the burning oil tank.

Military and medical sources said 18 soldiers and a Fajr Libya fighter were killed Thursday in fighting in Sirte, and another four soldiers slain in Al-Sidra.

Since fresh clashes between government forces and the jihadists erupted on December 13, Libya’s oil production has dropped to nearly 350,000 barrels per day compared with 800,000 previously, according to industry experts.

Production in Libya, a member of the OPEC oil-producing cartel, has only just started to rise following a prolonged disruption due to civil unrest.

More than three years after dictator Moamer Kadhafi was toppled and killed in a NATO-backed revolt, the North African state is still awash with weapons and powerful militias, and has rival parliaments as well as governments.

Analysts also said short-covering was propping up prices, with dealers largely ignoring a surprisingly bearish US stockpiles report released on Wednesday.

“Prices seem adamant on staying above support levels, and it seems they will hold for this festive season,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.

“We continue to attribute this to the short-covering at the end of the year as oil bears close out positions to celebrate the New Year,” he said. (AFP)