Oil prices are rising on Libya's concerns, but rising OPEC supply

SINGAPORE (Reuters) – Oil prices rose slightly on Tuesday due to uncertainty surrounding Libyan oil exports, although OPEC plans to increase production continued to weigh.

The Brent LCoC1 crude oil futures contract, an international benchmark for oil prices, stood at $ 74.81 per barrel at 0311 GMT, up 8 cents, or 0.1%, from at their last closing.

West Texas Intermediate (WTI) CLc1 crude futures were $ 68.24 per barrel, up 16 cents or 0.22%.

Traders said the prices were mainly motivated by the uncertainty surrounding oil exports from Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC).

The forces of the Libyan eastern commander Khalifa Haftar have entrusted the control of the oil ports to another national oil company (NOC) based in the east of the country.

The official public oil company based in the capital Tripoli, also known as NOC, will no longer be allowed to handle this oil, he added.

Ahmed Mismari, spokesman for the Libyan National Army (AFL) of Haftar, said on television that no tanker would be allowed to dock in eastern ports without permission of a NOC entity based in Benghazi.

"This decision increases the risk that Libyan oil production will be closed, as the Tripoli NOC is the only legal entity to have the right to sell oil," said Sukrit Vijayakar, director of the energy consulting firm Trifecta.

Uncertainty over Libyan oil exports comes after OPEC and a group of non-OPEC partners, including OPEC, announced an increase in supply of around 1 million barrels per day (bpd) to cool the oil markets.

Oil markets have tightened significantly since 2017, when OPEC and its partners began retaining supply to support falling prices at the time.

"Despite the agreement of OPEC (last week), we believe that a tightening of supply is expected to drive up oil prices in 2018," said Jason. Gammel from the US investment bank Jefferies in a note.

"We expect Brent prices to be over $ 80 a barrel at 2:18," he added.

Bank of America Merrill Lynch (BoAML) said the tense market conditions would drive Brent prices to $ 90 a barrel by the second quarter of 2019.

But BoAML warned of uncertainty because the impact of US sanctions announced against Iran was not yet clear, and that the effects of the global trade conflict between the United States and the US Other major economies, including the European Union and China, are gradually taking effect.

"We estimate a drop in demand of 44,000 b / d for every 1% drop in world trade," the bank said.