MARKET WATCH: Brent oil prices spike after weekend reports of Mideast unrest

Oil futures prices escalated Oct. 28 on the London market while climbing modestly on the New York market following reports of weekend unrest in Libya and Iraq that sparked concerns about possible oil supply disruptions.

Analysts primarily attributed the rally in Brent crude futures to reports of plunging Libyan production stemming from political instability and labor strikes at that country’s oil export terminals. The latest concerns stemmed from a labor protest at El Sharara field although observers expect that protest to end soon.

“Two of the most volatile oil producers—Libya and Iraq—experienced serious unrest over the weekend, and we think there is a high risk that the security problems could grow more acute and effect output in both countries,” Barclays analyst Helima Croft said.

In Iraq, multiple bombing attacks targeted commercial areas, killing dozens of people, authorities said.

Meanwhile, Goldman Sachs maintained its near-term Brent price forecast of $110/bbl, saying any additional disruptions in Libya could drive prices higher.

Goldman Sachs also revised its supply outlook for the Organization of Petroleum Exporting Countries downward through Dec. 31, saying “crude oil supplies from Libya will remain significantly constrained, around 650,000 b/d.”

Energy prices

The New York Mercantile Exchange December crude contract for December delivery rose 83¢ on Oct. 28, settling at $98.68/bbl. The January 2014 contract gained 91¢ to $98.86/bbl.

Heating oil for November delivery climbed 5.47¢ to a rounded $2.96/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for November delivery gained 4.38¢ to a rounded $2.63/gal.

The November natural gas contract dropped 13.8¢ to a rounded $3.57/MMbtu on NYMEX. On the US spot market, the gas price at Henry Hub, La., was a rounded $3.62/MMbtu, down 5.1¢.

In London, the December ICE contract for Brent crude oil soared $2.68 to settle at $109.61/bbl while the January 2014 contract escalated $2.45 to $109.04/bbl. The November contract for ICE gas oil rose $16 to $925.75/tonne.

The OPEC basket of 12 benchmark crudes was up 78¢ to $105.75/bbl on Oct. 28.

Contact Paula Dittrick at

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