Escalating violence in South Sudan in the past two weeks is threatening to cut the country’s crude output further, adding to supply outages in Libya, where production is running at a mere 250,000 barrels per day.
“Brent is relatively well-supported above $110 a barrel by lower output in Libya and South Sudan,” said Chee Tat Tan, investment analyst at Phillip Futures in Singapore told Reuters.
Brent crude for February delivery rose 18 cents to $112.36 per barrel this morning, after settling 20 cents higher on Friday.
US crude futures for February delivery were down 10 cents at $100.22 per barrel.
The contract broke above the $100-mark on Friday for the first time since 21 October and settled 77 cents higher, fuelled by a decline in US oil inventories.
US crude oil stocks fell 4.7 million barrels last week as the Gulf Coast continued to shed inventories, even as US oil production reached a 25-year high.
Despite an offer of a truce to end the conflict in South Sudan last week, the country’s army fought ethnic militias over the weekend in a battle that has left at least 1000 dead and split the oil-producing country barely two years after it won independence from Sudan.
Oil output in South Sudan had fallen by nearly a fifth to 200,000 bpd after the Unity state oilfields shut early last week due to fighting.
In Libya, oil security guards have threatened to block a gas pipeline to the capital Tripoli, escalating a wave of strikes at oilfields and export terminals gripping Libya, reducing its lifeline oil exports to a trickle.
Brent was also supported by a deal to end a strike at Total’s Gonfreville refinery in France on Friday.
The refinery was the last of five sites to halt a walkout that began two weeks ago and affected more than half of the country’s refining capacity.
A fire at an offshore oil platform operated by Petroleo Brasileiro SA, Brazil’s state-run oil company, injured two workers and cut output from the Marlim field, one of Brazil’s largest, by about 22,000 bpd, Petrobras was quoted as saying.
In Norway, output at the Statfjord A platform in the North Sea resumed on Sunday, only a day after the platform was shut due to an oil and gas leak, operator Statoil was quoted as saying.
The Statfjord field, which includes production from Statfjord B and Statfjord C platforms, produced some 129,000 barrels per day in December.
Yemen has resumed crude oil flows through a pipeline in its eastern Hadramout province one day after tribesmen blew it up, a local official said on Sunday.
The pipeline transports crude oil from Massila oilfield, the country’s largest, to the port of Mukkala.
Experts from Iran and six world powers will resume talks on Monday on how to roll out last month’s landmark nuclear deal in Geneva, hoping to resolve numerous technical issues before the accord can take effect.