Record production (copy)

A pair of pump jacks rotate near Epping in this 2013 file photo. 

Oil prices were close to a seven day high in early trades Monday, with investors believing supplies will remain tight amid producer restraint, despite a recent rise in Libyan oil output.

Brent crude was down 10 cents to $85.96 a barrel in early morning trades, the highest that contract has been since Oct. 3, 2018, when it was $86.71. WTI, meanwhile, was flat at $83.82, almost as high as the last peak on Nov. 10, which was $84.78.

Many analysts are still predicting $100 oil, based on supply outages and signs that Omicron won’t be as disruptive to energy demands as previous strains of coronavirus. Geopolitical tensions in the Ukraine are also feeding bullish sentiment. Russia has 100,000 troops on the border of Ukraine.

OPEC+, meanwhile, met recently and agreed to continue with the plan of gradual 400,000 barrel per day increases that it has been following.

Libya, which has been under a blockade, added 1.2 million barrels of supply per day. It had been as low as 700,000 per day.

Reuters reported that China is considering another release from strategic reserves to help ease supply constraints. The U.S., China, Japan, India and other countries have already released oil once from reserves, trying to ease prices and cool inflation.

Crude oil processing in China rose 4 percent in 2020 to 14.3 million barrels per day, according to a Bloomberg report. That’s a new record, but it’s also likely to be broken again soon. Two new facilities are coming online with a combined capacity of 720,000 barrels per day refining capacity daily.

China is the world’s biggest oil importer. Over the last seven years it accounted for as much as 44 percent of global oil import growth.

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