Global benchmark Brent crude hovered above $81/bbl on July 14, with bullish sentiment over U.S. demand bolstered by supply disruption in Libya and Nigeria.
On July 13, some oilfields in Libya were shut down because of a local tribe's protest against the kidnapping of a former minister. Separately, Shell suspended loadings of Nigeria's Forcados crude oil, owing to a potential leak at a terminal.
The Libya disruption is halting an estimated 370,000 bbl/d while the loss from the Nigerian outage is pegged at 225,000 bbl/d, said PVM analyst John Evans.
With the "market in thrall of a ‘tightening’ narrative", any more outages will push the oil price to levels that not even the most ardent bull would have predicted for the second half of the year, Evans added.
Russian oil exports have also decreased significantly and, if this trend were to continue next week, this would probably drive the price up further, particularly since Russian oil exports are set to be reduced by 500,000 bbl/d in August, added Commerzbank analysts.
Both Brent and WTI futures crept lower at 1318 GMT, with Brent 30 cents down at $81.06/bbl and WTI 34 cents lower at $76.55.
Further price support came from July 13's reports by the International Energy Agency (IEA) and Organization of the Petroleum Exporting Countries (OPEC) predicting that oil demand will pick up in the second half of the year, particularly in China, despite broader macroeconomic headwinds.
National Australia Bank said in a research note on July 14 that it expected the OPEC forecast, if realized, "to deliver oil prices well above $100 a barrel", adding that the softening value of the U.S. dollar continued to boost commodity prices.
Cooling U.S. inflation has also given markets hope that the U.S. Federal Reserve could be close to ending its fastest monetary policy tightening campaign since the 1980s.
"The light at the end of the tightening tunnel is getting brighter and investors are increasingly confident of emerging after one more hike in two weeks," said Craig Erlam, senior market analyst at OANDA.
Saudi Arabia and Russia, the world's biggest oil exporters, this month agreed to deepen oil cuts in place since November last year, providing further support to crude prices.
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