Oil prices rebounded from a seven-month low as global equity markets recovered and attention shifted to disruptions in Libya. Brent crude oil surged towards $78 a barrel, recovering from a drop of over 5% in the previous three sessions, while West Texas Intermediate (WTI) traded above $74. This rise followed gains in Japanese stocks and US equity futures after a significant global market downturn on Monday. The halt in production from Libya’s Sharara field, amid ongoing political strife in the North African country, also contributed to the price increase.
The market remains vigilant over the possibility of retaliatory actions by Iran and regional militias against Israel, in response to the recent killings of Hezbollah and Hamas officials. Despite these tensions, Tehran has reiterated its desire to avoid a full-scale war.
On Monday, Brent crude prices approached $75 a barrel before climbing back up due to the Libyan production halt and concerns over potential disruptions in the Middle East. Prices have now returned to levels seen at the beginning of the year, bolstered by OPEC+ production cuts.
Goldman Sachs analysts, including Daan Struyven, suggest that Brent oil prices are likely to hold steady around the $75 mark despite broader macroeconomic uncertainties. They point to a limited risk of a US recession, robust oil demand in developed countries and India, and increased speculative investment as factors supporting the market.
Investors are awaiting an industry report later Tuesday to assess US crude oil inventories, which have declined for five consecutive weeks—the longest streak since early 2022. Official inventory data is expected on Wednesday.
