Oil extended gains as supply disruptions in Libya, increased tensions in the Middle East and an OPEC statement stressing its commitment to stabilizing prices ushered bulls back into the market.

West Texas Intermediate rose more than 3 per cent to trade above US$72 on Wednesday amid the slew of bullish developments. Libya’s Sharara field, the country’s largest, has begun the process of fully shutting down after protests. The field had been pumping about 300,000 barrels a day recently.

Meanwhile, Houthi militants claimed to have attacked another merchant ship in the Red Sea. Iran has dispatched a warship to the waterway, representing its most audacious move to challenge U.S. forces in the key trade route and possibly emboldening the Houthis.

Further heightening tensions, Iran suffered two blasts that killed more than 100 people. The Iranian government didn’t say who was responsible for the attacks.

“Nobody wants to be short crude below $70 when there is unrest in the Middle East,” said Dennis Kissler, senior vice president at BOK Financial.

The Organization of Petroleum Exporting Countries also on Wednesday released a statement saying it was committed to “unity, full cohesion and market stability.”

Traders are assessing whether strong non-OPEC supply will remain a dominant oil-market theme in again 2024. Higher output from outside of the producer group has so far countered its efforts to tighten the market — but extended curbs take effect this week.

Prices:

• WTI for February delivery climbed 3.1 per cent to $72.59 a barrel at 11:42 a.m. in New York.
• Brent for March settlement rose 2.9 per cent to $78.10 a barrel.