Oil prices are hovering above $81 due to supply disruption

Global benchmark Brent crude hovered above $81 a barrel on Friday as sentiment on US demand rose, supported by supply disruptions in Libya and Nigeria.

Brent and US West Texas Intermediate crude futures rose for the third consecutive session and in early Asian trading on Friday and are on track for a third consecutive week of gains for the first time since April.

And on Thursday, a number of oil fields in Libya were shut down as a local tribe protested the kidnapping of a former minister. Separately, Shell has halted shipments of Nigerian crude oil due to a possible leak at a terminal.

Tamas Varga, an analyst at BVM, said that the supply disruption in Libya is stopping an estimated 370,000 barrels per day, while the loss from the disruption of Nigerian crude oil shipments is estimated at about 225,000 barrels per day.

Brent crude futures or WTI futures were unchanged at 0809 GMT. Brent crude futures were trading at $81.36 a barrel, and West Texas crude futures at $76.89 a barrel.

Prices received further support from reports issued by the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) on Thursday, which expected oil demand to rise in the second half of the year, particularly in China, despite unfavorable macroeconomic conditions.

Declining inflation in the US has also given markets hope that the US Federal Reserve is closer to ending the fastest monetary tightening cycle since the 1980s.

Saudi Arabia and Russia, the world’s largest oil exporters, also announced this month an increase in oil production cuts that have been in place since November last year, providing further support for crude prices.