prices eased on Tuesday, slipping away from 5-month highs reached earlier in the session as a sluggish economic outlook countered an otherwise tight market.
International benchmark Brent futures touched their strongest level since last November at $71.34 per barrel on Tuesday, before losing ground to $70.96 per barrel by 0158 GMT, down 14 cents, or 0.2 per cent, from their last close.
US West Texas Intermediate (WTI) crude oil futures also hit a November 2018 high, at $64.77 per barrel, before easing to $64.36, 4 cents below their last settlement.
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.
And while fears of a global recession ebbed following strong US jobs figures and improved Chinese manufacturing data late last week, Bank of America Merrill Lynch said there was still a “significant slowing in growth globally” in 2019.
The bank said it expects Brent and WTI to average $70 per barrel and $59 per barrel respectively in 2019, and $65 per barrel and $60 per barrel in 2020.
Despite the economic concerns, global oil markets are tight, and Brent and WTI crude oil futures have risen by 40 per cent and 30 per cent respectively since the start of the year.
“Renewed fighting in Libya … has seen Brent crude break above $70 per barrel,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Libya is a significant supplier of oil to Europe, producing around 1.1 million barrels per day (bpd) of crude in March.
A warplane attacked Tripoli’s only functioning airport on Monday as eastern forces advancing on the Libyan capital disregarded international appeals for a truce in the latest of a cycle of warfare since Muammar Gaddafi’s fall in 2011.
Hansen said the fighting in Libya added to an already tense market, which has been tightened this year by US sanctions on oil exporters Iran and Venezuela as well as supply cuts led by the producer club of the Organization of the Petroleum Exporting Countries (Opec).