By Sarah McFarlane
Brent crude edged up on supply problems in Libya on Wednesday, with the recent output issues expected to take some time to resolve.
Brent crude, the global oil benchmark, was up 0.1% to $77.87 a barrel on London's ICE Futures exchange, near a more than three-year high of $80.50 hit in May. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at $73.83 a barrel.
Earlier this week, Libya's National Oil Co. declared force majeure on loadings from some of its ports after a military faction stopped vessels entering the ports. Up to 850,000 barrels a day of supply has been shut in.
"In the very short term our expectations are for Brent to climb back over $80, Libya being a key factor," said Harry Tchilinguirian, senior oil strategist at BNP Paribas.
Oil prices have risen around 3% over the past two weeks in light of falling global inventories and the belief that the decision by the Organization of the Petroleum Exporting Countries to pump more oil wasn't enough to offset falls in production expected from Iran and Venezuela.
Brokerage PVM estimated the combined impact of the Libyan supply issues, sanctions curbing Iranian output later in the year and the continuation of falling output from Venezuela could remove more than 2 million barrels a day of production from May levels.
For the latest information on inventories, investors were awaiting official weekly data on U.S. stocks and production due to be published by the Energy Information Administration on Wednesday. Industry group the American Petroleum Institute said Tuesday that its own weekly data showed a 4.5-million-barrel decrease in crude inventories.
"If the EIA confirms a draw in the same order of magnitude, the lower inventories mean a lower buffer for the market for unplanned outages," said Mr. Tchilinguirian, adding that OPEC members will have already used some of their spare capacity too.
Nymex reformulated gasoline blendstock -- the benchmark gasoline contract -- rose 0.3% to $2.12 a gallon. ICE gasoil changed hands at $665.75 a metric ton, up $9.50 from the previous settlement.
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