Oil futures: Brent nears $80/b on geopolitical concerns

Quantum Commodity Intelligence – Crude oil futures were pushing higher Monday, having initially opened the week softer after Libya lifted the force majeure on its Sharara oil field, with broader fundamentals balancing out the increase in Libyan output.

Front-month Mar24 ICE Brent futures were trading at $79.95/b (1705 GMT), compared to the day's low of $77.81/b and Friday's settle of $78.56/b.

At the same time Mar24 NYMEX WTI was trading $74.80/b, versus Friday's settle of $73.41/b, while Feb24 was $74.83/b heading into the expiry.

Libya's National Oil Corporation ended a force majeure on the 300,000 bpd Sharara basin, the nation's largest oil field, alleviating fears that the protest that had shut off production could spread.

But wider geopolitical tensions in the Middle East offset higher oil production after crude prices had ended the previous week little changed following more upbeat reports from the IEA and OPEC.

The IEA made an upward revision to its growth forecast for global consumption in 2024, raising its demand growth forecast by 180,000 bpd as it warned on heightened supply risks with oil flows disrupted by attacks in the Red Sea.

OPEC said it sees robust oil demand growth of 2.2 million bpd in 2024, citing continued solid economic activity in China and expected firm growth in other non-OECD countries.

Oil prices have also been buoyed by heightened tensions in the Middle East and shipping disruptions through the Red Sea, while weather-related outages in the US supported crude.

"Ongoing tensions in the Middle East and oil output disruptions due to bad weather in the US overshadow concerns over the health of the Chinese economy and worries about high-interest rates for longer," commented City Index analyst Fiona Cincotta.

Oil prices were also supported as traders hiked bullish bets on ICE Brent futures again last week, extending net length by 15.7k contracts in the week to 16 January to 222.2, the highest since late September.