"The ongoing unrest in the Middle East and intense fighting in Libya continue to limit the downside" for crude oil prices, said Andrey Kryuchenkov, a commodities analyst at VTB Capital financial group. Rebels in Libya were pushing west towards the capital Tripoli after coalition air strikes on Sunday hit Sirte, the hometown of leader Moamer Qadhafi. Anti-government forces have started retaking towns they lost to government forces last week and have promised that their uprising would not further hamper oil production in areas under their control. One representative said the opposition plans to begin exporting oil "in less than a week".
"We are producing about 100,000 to 130,000 barrels a day, we can easily up that to about 300,000 a day," Ali Tarhoni, the rebel representative responsible for economy, finance and oil, told a news conference at the weekend. Oil-rich Libya was producing 1.69 million barrels a day before the unrest but that had virtually ground to a halt. Elsewhere in the Middle East, security forces strove to restore order in Syria's northern city of Latakia after weekend chaos that left 15 dead and more than 150 injured in anti-government protests that began earlier this month. In Yemen, embattled President Ali Abdullah Saleh said he does not want to cling on to power but warned that only dialogue can save the country he has ruled for three decades from sliding into civil war. Oil prices were gaining support "from rising political tensions in Yemen and Syria as well as the ongoing civil war in Libya," analysts at research group JBC Energy wrote on Monday.
"Nevertheless, with the loss of most of Libya's production being greatly factored in a Brent price of $115 per barrel and crude output in Yemen and Syria being of relatively minor importance to global oil markets, the bullish (price) impact of this was rather small."