US crude futures surge by $1.50/bbl on Libya pipeline blast

HOUSTON (ICIS)–NYMEX WTI crude futures for February delivery hit fresh 2017 highs on Tuesday, settling at $59.97/bbl, up $1.50, in response to reports that a pipeline moving crude oil to the Libyan Es Sider terminal had been blown up in what appeared to be an act of sabotage.

Crude prices had dipped earlier in the day on expectations that the key Forties pipeline in the North Sea will resume deliveries in early January after repairs were completed following an unplanned shut-down of the system.

Upside momentum, also driven by a rally in ultra low sulfur diesel (ULSD) futures, penetrated key technical barriers, triggering buy stops.

Overall market participation was thin, and the rally may have been skewed by limited holiday trading volume.

The market has been factoring in Friday’s drilling rigs report showing an unchanged rig count during the previous week.

West Texas Intermediate (WTI), the US benchmark, penetrated the psychological $60/bbl barrier, hitting $60.01/bbl, up $1.54, before retreating on profit-taking ahead of the closing bell.

ICE Brent for February delivery also hit a two-and-a-half year high, topping out at $67.10/bbl and settled just off the top of the range at $67.02/bbl, up $1.77.