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Oil climbs to 5-month highs as the Libyan conflict feeds expectations of tighter global supplies



Oil futures climbed to fresh five-month highs on Monday, with U.S. prices are rising above $ 64 a barrel for the first time since late October, as fighting in Libya is fed by expectations for tighter global supplies.

Signs that trade tensions are easing between the U.S. and China also provided support for oil prices.

U.S. West Texas Intermediate crude for May delivery benchmark

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     CLK9, + 2.1

4%

The New York Mercantile Exchange rose $ 1.32, or 2.1%, to settle at $ 64.40 a barrel. The prices for the front-month contract are tallied a gain for the sixth straight session and marked the highest finish since Oct. 31, according to Dow Jones Market Data. The contract rose 4.9% for the last week.

June Brent

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     LCOM9, + 1.05%

rose 76 cents, or 1.1%, to $ 71.10 per barrel on ICE Futures Europe. Its settlement was the highest for a front-of-the-month contract since Nov. 7. Brent rose 4.1% for the week, for its second consecutive positive weekly performance.

The U.S. military said it pulled a small contingent of American forces from Libya as the country was on the brink of a full-scale civil war, with the fighting continuing around the capital of Tripoli.

The evacuation is the latest turn in a troubled history of American military involvement in Libya, which has been in turmoil since the overthrow of Moammar Gadhafi in an armed uprising supported by the North Atlantic Treaty Organization's airstrikes in 2011. US

"The self-proclaimed Libyan National Army (LNA) led by Khalifa Haftar has launched a defensive campaign against the Islamic State of Libya, Take the capital of Tripoli from [United Nations] -backed by the Government of National Accord (GNA), "said Robbie Fraser, global commodity analyst at Schneider Electric.

"While the move in Tripoli is not directly threatening oil exports and supply, the threat of sanctions creates a significant upside risk, especially since the market is already facing tighter supply conditions, along with penalties for Venezuela and Iran," he said in a Monday note. .

The situation, combined with ongoing production cuts from the Organization of Petroleum Exporting Countries and Russia and U.S. sanctions on Venezuela and Iran, creates "a very lonely place for those who are looking for lower prices, especially President Trump who is now faced with the highest seasons cost of U.S. gasoline since 2014, "said Ole Hansen, Head of commodity strategy at Saxo Bank. He also said that the Bloomberg survey pegged Libya's crude production reached 1.1 million barrels a day last month.

Read: Gasoline prices up 8 straight weeks, with California on track to pay most in almost 5 years

In another sign of increasing tensions, the Trump administration on Monday was preparing to designate Iran's Islamic Revolutionary Guard Corps as a foreign terrorist organization, The Wall Street Journal reported, citing US officials

Meanwhile, there are reports that China's state-owned energy giant Sinopec had resumed buying U.S. Oil, which was bullish for the oil market, said consulting firm JBC Energy. According to the U.S. Energy Information Administration, U.S. Crude exports to China have dried up from mid-2018 through recent weeks, after having averaged over 300,000 barrels a day in the first half of last year.

"This has, over Q1, left a crude export flow more than twice the size of Libya to supply the rest of the world, where the crude demand growth is muted," the JBC Energy analyst said in a note.

A stronger-than-expected increase in March nonfarm payrolls helped to soothe worries for energy demand, providing a lift to oil prices last week. Data from oilfield service company Baker Hughes showing that the number of U.S. Oil rigs rose by 15 this week to 831 did nothing to dent market gains.

The oil market also looked at this week's major bond issue from Saudi Aramco. Bloomberg reported Monday that the company has received $ 60 billion in orders for its debut bond sale.

This is well above the $ 10 billion projected when the sale was first announced. The deal, from the state-controlled company that ranks as the richest in the world, carries high credit ratings and generates proceeds for a $ 69.1 billion acquisition of a majority stake in the petrochemical company Sabic.

In another energy trade, May gas

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     RBK9, + 0.98%

rose 1% to $ 1,988 a gallon, the highest finish for a front-of-the-month contract since Oct. 10. May heating oil

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     HOK9, + 0.68%

finished 0.7% higher, at $ 2.057 a gallon

May natural gas

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     NGK19, + 1.73%

rose 1.7% to $ 2.708 per million British thermal units.

Sarah McFarlane contributed to this article.

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