Investing.com – Crude oil prices settled higher on Tuesday buoyed by fresh supply disruptions following the explosion of a major Libyan oil pipeline while ongoing expectations that OPEC will continue to comply with the deal to curb output supported sentiment.
On the New York Mercantile Exchange crude futures for January delivery rose 2.6% to settle at $59.97 a barrel, while on London's Intercontinental Exchange, Brent added 2.56% cents to trade at $56.39 a barrel.
Oil prices started the week on the front foot after reports of a major oil pipeline explosion in Libya raised the prospect of fresh supply disruptions in the region.
Reuters reported, citing a Libyan oil source, that Libya’s crude oil output fell by about 90,000 barrels per day (bpd), following an explosion at a Waha oil company owned Libyan crude oil pipeline that feeds the Es Sider sea terminal.
The Mediterranean port of Es Sider is the largest oil depot in Libya with a capacity of more than 400,000 barrels a day.
The mostly positive day for oil prices comes amid ongoing optimism concerning OPEC’s compliance with the deal to curb output amid upbeat comments from Iraqi oil minister Jabar al-Luaibi, who said supply and demand would balance by the first quarter of 2018.
"During the first quarter of next year there will be more balance between supply and demand, which will reflect positively on improving global oil prices," Luaibi said.
In the U.S. meanwhile, traders turned attention to fresh inventory data from the American Petroleum Institute slated for Tuesday following an early indication of weaker future US production.
The number of oil rigs operating in the US remained unchanged at 747 in the week to Dec.22, said oil field services company Baker Hughes on Friday.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand. A higher rig count tends to signal a further rise in U.S. production.