U.S. Crude oil Prices jumps more than 3% best performance in last two weeks on Libya production halt

Libya’s eastern administration in Benghazi announced Monday that oil production and exports in the North African country would cease, citing a disagreement with the internationally recognized western government in Tripoli over who should manage the central bank.

The US benchmark reached a session high of $77.60 a barrel, its highest level since August 16.

These are Monday’s closing energy prices:

West Texas Intermediate

October contract price: $77.42 per barrel, up $2.59, or 3.46%. Year-to-date, US crude oil has gained 8.05%. Brent

October contract price: $81.43 per barrel, up $2.41, or 3.05%. The global benchmark is up 5.7% this year.

RBOB Gasoline

September contract price: $2.28 per gallon, barely changed. Year to date, gasoline is up 8.4%.

Natural Gas

September contract: $1.95 per thousand cubic feet, down more than 6 cents (3.26%). Year to date, gas is down 22.2%.

According to Matt Smith, Kpler’s lead oil analyst for the Americas, Libya produces approximately 1.2 million barrels per day, with more than 1 million bpd shipped to the global market.

“The force majeure on Libyan production and exports has the potential to have a significant impact on global markets,” Smith disclosed to CNBC.

According to Smith, the blockade will most likely benefit US crude, as Europe will buy US shale oil to replace lost Libyan supply.

Israel unleashed a massive wave of airstrikes in Lebanon on Sunday, portraying the operation as a preemptive assault to prevent Hezbollah from deploying missiles. Hezbollah claimed to have launched hundreds of missiles into Israel in response for the July killing of one of the militia’s senior commanders.

The Middle East has been on edge for weeks since the assassinations of a Hezbollah commander in Beirut and a Hamas leader in Tehran, Iran.

Iran has also sworn to respond against Israel, although the threatened attack has yet to occur.