But regardless, prices won't return to 2018 highs anytime soon: File Image/Pixabay
Growing military action in oil-rich Libya and other prospects pointing to a tightening market were the triggers for crude gains on Monday, and pundits warned that the Libyan situation could cause shock to the market in the near future - although at least one respected bank doesn't believe oil will climb to $80 any time soon.
Brent rose 76 cents, or 1.1 percent, to settle at $71.10 per barrel, while West Texas Intermediate gained $1.32, or 2.1 percent, to settle at $64.40 per barrel.
As eastern forces advanced on Libya's capital, John Kilduff, founding partner at Again Capital, said, "The violence in Libya is captivating the market; given the intense efforts of Saudi Arabia and other countries to restrict output, there is a sense that losing the Libyan oil, again, has the makings of a supply crunch."
Dave Ernsberger, S&P Global Platts
The fact that there might be a lack of Libyan supply to the market is potentially a bit of a shock
The situation weighed heavily on Dave Ernsberger, global head of energy at S&P Global Platts: he told CNBC that "The Libyan conflict coming back onto the front of the mind of the marketplace is actually very significant right now; we've seen Venezuelan production fall of a cliff, we've seen already inventories against the five-year average move into more bullish levels, so the fact that there might be a lack of Libyan supply to the market is potentially a bit of a shock."
Paul Horsnell, global head of commodities at Standard Chartered, noted that "The immediate barrels under threat would be those from the southwest which come up through into the west of the country, so that would be El Shahara field, a good 300,000, maybe up to 400,000 at immediate risk."
But he added, "it's the uncertainty of those supplies rather than the immediate changes in the flow" that will impact markets.
However, many of the ingredients of the crude crunch analysts seem to think is impending is short-term, for example: traders told media that Monday's crude gains were also driven by Genscape reporting that crude stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell by about 419,000 barrels last week.
Even the Libya situation is ephemeral, said Jeff Currie, global head of commodities at Goldman Sachs: "If you did lose that supply out of Libya right now, or a portion of it, most of the market would view it as being temporary as we've seen over the course of the last several years.
"So it would create and reinforce a spot price move to the upside and that $75 potential-plus range, but it wouldn't do anything at the back end."
Currie also said that oil won't be returning to the peak levels of $86 reached last year: "This market is in a million barrel per day deficit right now, and we think upside price is $70 to $75 (per barrel), but the back end anchored around $60."
As if to put everything into perspective, Reuters pointed out that crude prices could just as easily plummet this year as climb, and it cited Kirill Dmitriev, the head of Russia's direct investment fund, signaling on Monday that his country wants to raise oil output when it meets with the Organization of the Petroleum Exporting Countries (OPEC) in June.