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UPDATE 4-Oil hits five-month high above $71 on Libyan supply threat
* OPEC-led supply cuts tighten oil market
* U.S. sanctions against Iran, Venezuela also squeeze supply
* Libya fighting triggers concern over its oil exports
* U.S. crude inventories seen higher in weekly reports (Updates prices, adds comments, previous dateline SINGAPORE)
By Alex Lawler
LONDON, April 9 Oil hit a five-month high above $71 a barrel on Tuesday, supported by concern that violence in Libya could further tighten supply already squeezed by OPEC cuts and U.S. sanctions on Iran and Venezuela.Supply curbs led by the Organization of the Petroleum Exporting Countries have underpinned a more than 30 percent rally this year for Brent crude, despite downward pressure from fears of an economic slowdown and weaker demand.
Brent , the global benchmark, rose to $71.34 a barrel, the highest since November, and by 0825 GMT was up 14 cents at $71.24.U.S. crude also hit a November 2018 high of $64.77 and was later up 22 cents at $64.62.”Libya’s oil production and exports have not been jeopardised but the rise in tension is enough to send oil prices higher,” Tamas Varga of oil broker PVM said.OPEC member Libya pumps around 1.1 million barrels per day (bpd), just over 1 percent of global oil output. Supply has been volatile since the 2011 uprising against Muammar Gaddafi.
“Concerns over the potential squeezing of supply in Libya following the escalation of violence there are adding fresh impetus,” analysts at JBC Energy wrote.On Monday, a warplane attacked Tripoli’s only functioning airport as eastern forces advancing on the Libyan capital disregarded international appeals for a truce. despite generally bullish oil markets, concerns that an economic slowdown this year will hit fuel consumption have been preventing crude prices from rising even higher, traders said.