SINGAPORE: Oil prices rose on Monday, after dropping for the past two sessions, as escalating clashes in Libya stoked worries about supply from the OPEC member.
A fire caused by fighting at one of Libya's main export terminals has destroyed 800,000 barrels of crude - more than two days of the country's output, officials said, amid clashes between factions battling for control of the nation. .
"Libya, and all the other problems, warrants some kind of risk premium," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance. "Oil is at a level where people are happy to build in a risk premium," he said.
Brent crude was up 48 cents at $59.93 by 0530 GMT after hitting $60.40 in earlier in the day. The benchmark settled down 79 cents in the previous session.
US crude rose 69 cents to $55.42 after closing $1.11 down in thin trade on Friday. It rose to a peak of $55.74 in early trade on Monday.
Daniel Ang, an analyst with Singapore's Phillip Futures, expects Brent to stay around $60 and US crude to trade between $55 and $56 this week.
Oil prices also drew support from short covering by traders and plans by China and Japan to boost liquidity.
The People's Bank of China plans to loosen loan-to-deposit ratios for banks from next year. China's economy is expected to grow by 7 percent in 2015, slower than the forecast 7.3 percent in 2014, a government think-tank, the State Information Centre said on Monday.
Japan's government approved on Saturday stimulus spending worth $29 billion to help the country's lagging regions and households with subsidies, merchandise vouchers and other steps, which it hopes will boost GDP by 0.7 percent.
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