Oil Jumps 1% As Libyan Outages Add to Russia Supply Concerns

Libya's National Oil Corp announced Monday that "a painful wave of closures" had started at its facilities and declared force majeure at the Al-Sharara oilfield and other locations, adding to supply strains caused by Russia's sanctions.

"With global supplies becoming more scarce, even the smallest disturbance is going to have a disproportionate effect on pricing," said Jeffrey Halley, an analyst at brokerage OANDA.

Brent oil, the international standard, increased $1.46, or 1.3 percent, to $113.16 a barrel. The contract reached a record high of $114.84 per barrel on March 28.

US West Texas Intermediate crude oil increased $1.26, or 1.2 percent, to $108.21 a barrel. The benchmark price reached $109.81 per barrel, its highest level since March 28.

Further supply losses are possible. Russian output fell 7.5% in the first half of April compared to March, Interfax said Friday, and EU countries announced last week that the bloc's executive was formulating recommendations to ban Russian oil.

These remarks were made prior to an escalation in the Ukraine conflict. Ukrainian officials said that missiles targeted Lviv early Monday and explosions shook other towns as Russian troops continued their bombing campaign after their near-complete control of the Mariupol port.

In a pessimistic warning for prices, China's economy slowed in March, dimming first-quarter growth figures and aggravating an already bleak outlook due to COVID-19 restrictions.

China processed 2% less oil in March than a year before, with throughput dropping to its lowest level since October as rising crude prices pinched profits and tight lockdowns decreased demand.

In March, oil prices soared to their highest level since 2008, with Brent briefly exceeding $134.

"There is still some uncertainty about whether they would reopen their economy, so we are seeing conflicting signals from China this morning," Price Futures Group analyst Phil Flynn said.