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Oil prices rise as looming Norway strike adds to disruptions

Reuters  |  TOKYO 

By Aaron Sheldrick

TOKYO (Reuters) - Oil prices rose on Tuesday on escalating concerns over potential supply shortages, with Brent crude leading the way as hundreds of in Norway were set to strike later in the day.

Brent crude added 55 cents, or 0.7 percent, to $78.62 per barrel by 0638 GMT, following a 1.2-percent climb on Monday.

U.S. light crude futures were up 47 cents, or 0.7 percent, at $74.32.

Hundreds of workers on Norwegian offshore rigs are due to strike on Tuesday after rejecting a proposed wage deal, a move which will likely affect the production of at least one field, Shell's Knarr.

That potentially adds to disruptions in other amid tensions in the

The says it wants to reduce from Iran, the world's fifth-biggest producer, to zero by November, which would oblige other to pump more.

Saudi Arabia, fellow members of the Organization of the Petroleum Exporting Countries (OPEC) and allies including agreed last month to increase output to dampen price gains and offset global production losses in countries including

The market has grown concerned that if the Saudis offset the losses from Iran, that will use up global spare capacity and leave markets more vulnerable to further or unexpected production declines.

"The bottom line becomes the available spare capacity within OPEC ... and the markets have started to focus on that," said Victor Shum, at markets in

"It is likely that concern will support prices all through the summer, while demand continues to be strong during the summer peak," he said.

Libya's national fell to 527,000 barrels per day from a high of 1.28 million bpd in February following recent oil port closures, the of the said in a statement on Monday.

In Canada, an outage at the 360,000-barrel per day (bpd) reduced flows into Cushing, Oklahoma, the delivery point for U.S. futures.

Money managers raised their bullish bets on U.S. crude in the week to July 3, the said on Monday.

(Reporting by Aaron Sheldrick; editing by and Richard Pullin)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 12:29 IST