- WTI pares back gains led by Libyan oilfields shutdown news.
- Broad USD strength also weighs down on oil prices.
- Focus shifts to US weekly Crude Stock data amid thin trading.
WTI (oil futures on NYMEX) is seen surrendering most gains induced by the news that two large crude oil fields are shutdown in Libya following a military blockage. At the press time, the black gold trades near $58.75, looking to close the bullish opening gap.
The prices jumped to over one-week highs of $59.66 starting out in Asia this Monday, as oil bulls cheered the weekend reports of the Libyan outage. The Libyan state-run National Oil Corporation (NOC) said on Sunday that two big oilfields in the southwest had begun shutting down after forces loyal to the Libyan National Army closed a pipeline. The news stoked concerns of supply disruption from the OPEC producer, bumping up commodity prices.
However, the prices are seeing a pullback over the last hours, in the wake of the agreement by the main backers of the rival Libyan factions at the Berlin Summit for a permanent ceasefire in order to allow a political process to take place, per Reuters.
Further, a fresh buying wave seen in the US dollar against its major peers, mainly driven by aggressive selling in GBP/USD also collaborates with the latest move lower in oil. Meanwhile, the US dollar also continues to draw support from Friday’s strong US economic releases.
Attention now turns towards the US weekly Crude Stocks Change data for fresh trading impetus. Meanwhile, the developments surrounding the Libyan conflict will continue to remain the main driver for energy markets this week. Oil markets to focus on impact of Libyan geopolitical crisis – Westpac
WTI Technical levels to consider