Chart of the week: will the oil rally last?

Oil price chart

“Just as its oil sector looked set to stage a recovery, Libya is heading back towards bloody chaos that puts output and exports at risk,” Julian Lee notes on Bloomberg. A disruption to supplies from the North African country could give oil prices a big short-term boost. Global oil supplies already look tight due to the chaos in Venezuela, US sanctions on Iran and output cuts by oil-cartel Opec.

The biggest buyers of Libya’s crude are Mediterranean countries in Europe. Fears that the conflict might spread through the region have already driven oil prices higher above $70. However, US shale production hit a new record recently, so higher supplies could soon undermine the rally.