An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS
An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS

Tokyo — Oil prices rose on Tuesday on the escalating concern over potential supply shortages, with Brent crude leading the way as hundreds of oil workers in Norway were set to strike later in the day.

Brent crude had added 32c, or 0.4%, to $78.39 a barrel by about 3.03am GMT, following a 1.2% climb on Monday.

US light crude futures were up 17c, or 0.2%, at $74.02. They gained 5c to settle at $73.85 a barrel the session before.

Hundreds of workers on Norwegian oil and gas offshore rigs are due to strike on Tuesday after rejecting a proposed wage deal, a move that is likely to affect the production of at least one field, Shell’s Knarr.

That potentially adds to disruptions in other oil producers amid tensions in the Middle East.

The US says it wants to reduce oil exports from Iran, the world’s fifth-biggest producer, to zero by November, which would oblige other big producers to pump more.

Saudi Arabia, fellow members of oil cartel Opec and allies including Russia agreed in June to increase output to dampen price gains and offset global production losses in countries including Libya.

The market has grown concerned that if the Saudis offset the losses from Iran, that will use up global spare capacity and leave markets more vulnerable to further or unexpected production declines.

"The bottom line becomes the available spare capacity within Opec … and the markets have started to focus on that," said Victor Shum, vice-president for energy at IHS markets in Singapore.

"It is likely that concern will support prices all through the summer, while demand continues to be strong during the summer peak," he said.

Libya’s national oil production fell to 527,000 barrels a day from a high of 1.28-million barrels a day in February following recent oil port closures, the head of the National Oil Corporation said in a statement on Monday.

In Canada, an outage at the 360,000 barrels a day Syncrude oil sands facility reduced flows into Cushing, Oklahoma, the delivery point for US futures.

Money managers raised their bullish bets on US crude in the week to July 3, the US Commodity Trading Commission said on Monday.

Reuters

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