Crude oil futures declined overnight, but quickly recovered this afternoon on reports that British air forces bombed an oil field near the oil town of Brega in eastern Libya, killing two rebels and damaging a pipeline that ships crude to the Mediterranean port of Hariga.
The rebel army and pro-government forces have been fighting for Brega for nearly a week. The conflict appears to be far from over as the country’s longtime ruler Muammar Gaddafi is still refusing to step down despite mounting international pressure, while the rebels are strugglignt o hold on to their position.
The rebel forces have had to suspend production at two oil fields to focus their efforts on fending on assaults from Gaddafi loyalists.
The prices were pushed lower yesterday by an inventories report from the US Department of Energy, which said that crude oil stockpiles added 2 million barrels last week, suggesting a decline in demand from the world’s largest energy consumer.
US light, sweet crude for May delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), edged higher to US$108.92/barrel, while June crude reached US$109.57/barrel.
May Brent crude last advanced to US$122.19/barrel on the ICE Exchange.
Supermajors BP (LON:BP) and Shell (LON:RDSB) posted small losses, as did BG Group (LON:BG) and Tullow Oil (LON:TLW).
Cairn Energy (LON:CNE) dropped 2.3%.
Midcaps Premier Oil (LON:PMO) and Melrose Resources (LON:MRS) dropped 1.5% and 1% respectively.