Oil prices climbed higher on Monday, rising above $55 per barrel., benefiting from heightened tension beween the U.S. and Syria, and a shutdown at one of Libya’s largest oilfields.
The Sharara oilfield in Libya had been shut down for a week in early April. On Sunday, just days after returning to production, a group blocked a pipeline linking to an oil terminal, once again shutting down production.
Oil prices were also supported by heightened tensions in the Middle East after the U.S. launched an air strike at an air base in Syria.
An OPEC-led agreement to cut oil production has been supporting oil prices. The group agreed to cut production by 1.8 million barrels per day in the first half of 2017.
A high compliance rate among members and the possibility of an extension have improved sentiment.
Oil’s price rally has been limited by higher production in countries not participating in the agreement, such as the United States. Drillers in the U.S. added new oil rigs for the 12th straight week.
Gold Prices Tumble
Gold prices tumbled amid heightened expectations that the U.S. Federal Reserve will raise rates in the near future.
The yellow metal fell 0.16% to $1,255.35 per troy ounce.
The dollar was higher, which led to weaker gold prices. A stronger dollar makes the metal less attractive as an asset.
Demand for the dollar was underpinned by a comment from New York Fed President William Dudley, who said the central bank’s plans to trim its balance sheet would only prompt a slight pause in its rate hike plans.
Investors shrugged off comments from St. Louis Fed President James Bullard said the Fed may start shrinking its portfolio later in the year. This may reduce the need to raise rates.
Investors also shrugged off disappointing employment data on Friday. The U.S. economy added 98,000 jobs in March, according to the Labor Department.