Oil rises on Libya supply disruptions

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Brent crude rose on Monday as fresh export disruptions in OPEC nation Libya stoked supply concerns.

Striking security guards reimposed a two-week-old shutdown at the country's two biggest crude export terminals, which have the capacity to ship around 600,000 barrels per day, just hours after they had reopened.

Production was also disrupted at a number of fields by similar protests, creating the worst supply disruptions in the country since the 2011 civil war.

"We saw some reaction to concerns about supplies in Libya, which helped to give us some support in an otherwise quiet day," said Phil Flynn, an analyst with Price Futures group in Chicago.

For details on Libya's oilfields and ports, see:

Brent crude rose 75 cents to settle at $108.97 a barrel, having fallen to a low of $107.43. Brent rose back above its 200-day moving average, a key technical indicator watched by traders, at $108.16.

U.S. crude oil for September delivery inched up 13 cents to settle at $106.11 a barrel, having fallen to a low of $105.03 a barrel.

The premium of international benchmark Brent over its U.S. counterpart widened to settle at $2.86 a barrel.

Upcoming maintenance work at Iraq's key southern export hub is expected to cut supplies by 500,000 bpd in September, lending further support to prices in the medium term.

"We remain constructive on prices this summer as seasonally stronger crude demand and supply disruptions point to tighter balances (in the third quarter)," Morgan Stanley analysts said in a note.

"We expect spot prices to remain elevated, and moves above $110 remain possible."

Traders also watched European refineries, which are set to cut processing rates by around 500,000 bpd this week as soaring oil prices cut already weak profit margins.

WAITING FOR BERNANKE

Market players were also waiting to review economic data out of the United States this week, looking for hints when the Federal Reserve will start winding back its monetary stimulus program.

The United States will issue reports on retail sales, consumer prices, housing starts, industrial production and surveys of regional manufacturing in the coming days.

Any reduction in economic stimulus by the Fed will cut the flow of cheap central bank money that has boosted market liquidity and bolstered riskier markets like commodities.

On Friday oil prices had rallied after Chinese data showed crude imports into the world's No.2 oil consumer rose to a record in July, although implied oil demand softened from a four-month high in June.

TRADERS FORECAST INVENTORY FALLS

U.S. crude oil and gasoline stockpiles likely fell last week, according to seven analysts polled by Reuters on Monday.

The poll, which comes ahead of weekly inventory reports from the American Petroleum Institute and the U.S. Energy information administration, forecast a 1.5 million barrels draw in crude oil inventories and a 900,000 barrels fall in gasoline stockpiles.

Both draws are larger than the ones seen last week, when the EIA reported falls of 1.3 million barrels in crude stockpiles and of 100,000 barrels in gasoline.



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