Oil prices rise on violence in Libya

West Texas Intermediate for February delivery rose 46 cents to $55.19 while Brent crude for February gained 35 cents to $59.80 in late-afternoon trade.

Daniel Ang, investment analyst at Phillip Futures in Singapore, said investors are showing concern as the “armed conflict in Libya is affecting crude oil flows”.

Forces loyal to Libya’s internationally recognized government on Sunday carried out air strikes against Islamist militia following attacks on the country’s crucial Al-Sidra oil export terminal.

The Fajr Libya (Libya Dawn) group has been trying to take Al-Sidra and the nearby Ras Lanuf terminal since Thursday when it killed at least 22 soldiers in a surprise attack by speedboat.

Seven oil storage tanks at Al-Sidra were set on fire as a result of the fighting.

On Sunday firefighters managed to extinguish four of the fires, an oil official said.

Since fresh clashes first erupted around the export terminals on December 13, Libya’s oil production has dropped to fewer than 350,000 barrels per day compared with 800,000 previously, industry experts say.

More than three years after dictator Moamer Kadhafi was toppled, Libya is awash with weapons and powerful militias, and has rival parliaments and governments.

Ang said oil prices will “continue to trade range-bound” with no major fluctuations expected ahead of the New Year holiday.

With few other leads in the market this week, US crude stockpiles data to be released Wednesday will be closely watched, he added. (AFP)