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Oil rises above $79 a barrel on Norway strike, Libyan disruption

Reuters  |  TOKYO/LONDON 

By Aaron and Dmitry Zhdannikov

TOKYO/LONDON (Reuters) - rose more than $1 per barrel on Tuesday due to growing supply outages, with Norway shutting one oilfield as hundreds of workers began a strike and saying its production more than halved in recent months.

The disruptions add to supply worries around the world. Venezuela's production has collapsed due to a lack of investment and Iranian exports have suffered due to U.S sanctions. OPEC has little capacity to fill the gap as demand for

Benchmark Brent rose by 96 cents, or 1.2 percent, to $79.03 per barrel by 1058 GMT. They earlier hit an intraday high of $79.29. Brent gained 1.2 percent on Monday.

U.S. light crude futures were up 38 cents, or 0.5 percent, at $74.23.

Mounting supply concerns could push Brent above $85 per barrel, said in a note.

"Renewed geopolitical supply-side disruptions stemming from Canada, Iran, Libya, and the U.S. raise the likelihood of and with it upside risks to in the near term," MUFG said.

Hundreds of workers on Norwegian offshore went on strike on Tuesday after rejecting a proposed wage deal, leading to the shutdown of one Shell-operated oilfield.

That potentially adds to disruptions in other amid tensions in the

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, said on Monday.

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 and allies including agreed last month to increase output to dampen price gains and offset global production losses.

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

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

(Reporting by Aaron in Tokyo and in London; editing by and Dale Hudson)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 16:39 IST
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