By Sarah McFarlane
Oil prices were mixed on Monday, with Brent boosted by ongoing supply issues in Libya, while signs of rising output in the U.S. weighed on West Texas Intermediate crude.
Brent crude, the global oil benchmark, was up 0.8% to $77.71 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.2% at $73.62 a barrel.
Unplanned supply outages in Libya and Canada, which started earlier this month, are helping support the market with prices holding near more than three-year highs. Expectations that U.S. sanctions against Iran and the continued economic crisis in Venezuela could further deplete global oil supplies were also bullish.
"In a worst-case scenario you lose two million barrels a day from Iran and one million from Venezuela, totaling three million barrels a day and suddenly the increases from OPEC aren't nearly enough to cover it," said Tom Pugh, commodities economist at consultancy Capital Economics.
Rising output from the Organization of the Petroleum Exporting Countries and Russia is offsetting the tighter supply outlook for now, however.
The number of rigs drilling for oil in the U.S. rose by 5 to 863 -- a proxy for activity in the sector -- according to data published on Friday by oil-field services firm Baker Hughes, a GE company. The Energy Information Administration forecasts U.S. crude production to average a record 11.8 million barrels a day next year, as the industry responds to higher oil prices and logistical constraints are addressed.
"Producers are going to want to be fully ready for when these new pipelines come on board so we would expect to see rigs continue to increase in anticipations of the logistical constraints being eased," said Mr. Pugh.
Investors continued to monitor the developing trade war between the U.S. and China after the countries introduced tariffs on each other's exports last week. So far crude has been kept of China's list of goods it imports from the U.S. but it has indicated this could change.
"Less global trade or even tariffs on crude oil could weigh on oil prices," said consultancy Global Risk Management in a note.
Nymex reformulated gasoline blendstock -- the benchmark gasoline contract -- rose 0.8% to $2.13 a gallon. ICE gasoil changed hands at $670.25 a metric ton, up $5.50 from the previous settlement.
Write to Sarah McFarlane at [email protected]