Oil clocked in an estimated 1% gains on Thursday, continuing its upward movement from Wednesday as the market was dampened by supply sentiments. In line with this, demand concerns were minimized following a big decline in new novel coronavirus diagnosis at Hubei province in China.
Disputes in Libya which led to port and oilfields restrictions remained unresolved while the mandate imposed by the United States to Rosneft (ROSN.MM), pulling out Venezuelan oil from the market, sparked concerns on oil supply. The conflict further impacted oil activity as it cut demand by 1 million barrels per day, while the general decline brought by oil restrictions have surpassed $1.6 billion mark.
Brent crude futures LCOc1 added 45 cents, equivalent to 0.8%, and last stood at $59.57 per barrel by 0208 GMT. The international benchmark advanced up to 2.4% on Wednesday.
“The oil market is starting to realize that as bad as the demand destruction is from the coronavirus, the lack of exports from Libya might be meeting the oil demand destruction barrel for barrel,” said Phil Flynn of Price Futures Group.
“Libya was exporting 1.2 million barrels a day. That is more than the demand destruction estimates of about 400,000 barrels a day to about 1 million a day,” he added.