Oil Rebounds as Global Tensions Raise Supply Disruption Fears
NEW YORK, Aug 4 (Reuters) - Oil prices on both sides of the Atlantic climbed on Monday, as investors shifted their attention from worries about swelling supplies to concerns about ongoing violence in Libya and other global hotspots.
Oil prices fell sharply last week, with the front-month of Brent crude hitting its lowest level since April, and traded lower early on Monday before bouncing back into positive territory.
Brent crude gained 57 cents to settle at $105.41 a barrel, off a session low of $104.52. U.S. crude gained 41 cents to settle at $98.29 a barrel, after touching a session low of $97.43.
The spread between the two benchmarks closed at $7.12.
North Sea crude for immediate delivery has been at a discount to futures for the longest period since 2011. This contango market structure indicates a well-supplied market.
"The market is trying to stabilize after we reached a four-month low last week," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. "We still have those geopolitical hot spots and the market seems to be taking that into account."
Buyers were lured back by fears of growing oil supply disruptions due to escalating violence in Libya and Iraq, both major producers, and the crisis in eastern Ukraine, where Russian-backed separatists are fighting Ukrainian government troops.
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