An explosion on a pipeline carrying crude oil from Libya's south to a port terminal in its north Tuesday will slash production, the country's National Oil Company said.
Some traders are "wrapping up their books" at the end of the year, according to Ashley Petersen, lead oil analyst at Stratas Advisors in NY. Prices hit a session high of $66.83 a barrel, the highest since late May 2015.
Brent crude futures dropped to $66.62 a barrel, down 0.6 percent, or 40 cents, at 1556 GMT after breaking through $67 for the first time since May 2015 the previous day. The global benchmark crude traded at a premium of $6.80 to WTI.
Consequently cutting Libya's output by 100,000 barrels per day (bpd).This led to a spike in #Oil Prices to mid-2015 highs as the Brent crude, the worldwide benchmark for oil prices, went up to $67-and-some a barrel - an outstanding rise of 2.8 percent according to a report by CNBC on the explosion.
The unplanned shutdown of the Forties pipeline on December 11 pushed Brent to its mid-2015 high, while the OPEC action has lent support to prices all year.More news: Cardinals coach Bruce Arians: 'Nothing decided' on future with Arizona
"The confirmation that Forties is coming back is the main development of the long weekend", said Olivier Jakob, analyst at Petromatrix.
The API report was also said to find that gasoline inventories rose by 3.13 million barrels last week and supplies at the key Cushing, Oklahoma, pipeline hub declined by 1.27 million barrels, the people said. The EIA will release U.S. crude oil production data on December 28, 2017.
"Inventories are trending directionally in a favorable way", Bokoff said.
The Forties and Libyan outages, which together amount to around 500,000 bpd, are relatively small in a global context of both production and demand approaching 100 million bpd.