Shutdown of Libya39;s Sharara oilfield tightens supply
U.S. crude inventories fall more than expected API
Coming up EIA supply report, 1600 GMT

LONDON, Jan 4 Reuters Oil rose more than 1 on Thursday, adding to gains in the previous session on concerns over Middle Eastern supply following disruptions at an oilfield in Libya and heightened tensions regarding the IsraelHamas war.

On Wednesday, local protests forced a production shutdown at Libya39;s Sharara oilfield, which can produce up to 300,000 barrels per day. The field, one of Libya39;s largest, has been a frequent target for local and broader political protests.

Brent crude rose 92 cents, or 1.2, to 79.17 a barrel by 0908 GMT, while U.S. West Texas Intermediate crude futures rallied 93 cents, or 1.3, to 73.63.

A confluence of headlines around further tensions in the Red Sea and a full shutdown of Libya39;s Sharara oilfield from local protests have renewed concerns about global oil supply disruptions, said Yeap Jun Rong, market strategist at IG.

On Wednesday both benchmarks gained around 3 to settle higher for the for the first time in five days. Oil also found support from American Petroleum Institute data showing crude stocks fell by 7.4 million barrels, double the expected drawdown.

Although the API also reported rising product stocks, it is likely that oil watchers will concentrate on the 7.4 millionbarrel draw in crude inventory because of Libya and the rekindled war premium, said John Evans of oil…