Brent Slips below $105

Posted by George Backwell
Monday, August 11, 2014
HFO: File image

Brent crude slipped under $105 a barrel on Monday, dropping from a one-week high hit on Friday, as U.S. intervention in Iraq eased concerns over the risk of disruption to supply from OPEC's second-largest producer.

* U.S. conducts air strikes on Islamic State targets in north Iraq
* Oil output in Iraqi Kurdistan unaffected by incursion
* Iraqi Kurdistani oil firms pull out staff due to conflict

Analysts have said that U.S. air strikes on Islamic State targets in northern Iraq over the weekend could help enforce stability in the country, curbing the risk of supply disruptions. Iraqi Kurdistan said on Friday that its oil output remained unaffected.

"For this week, there's going to be one word on traders' lips, and that word is 'Iraq'," said Ben Le Brun, a market analyst at OptionsXpress in Sydney.

September Brent crude dropped 5 cents to $104.97 a barrel by 0642 GMT. The contract jumped more than $1 to hit a weekly high of $106.85 on Friday before settling 42 cents lower.

U.S. crude gained 12 cents to $97.77 a barrel.

Oil is balancing between potential short-term supply disruptions, which so far have not materialised, versus long-term supply growth prospects, said Mark Keenan, head of commodities research Asia at Societe Generale.

Prompt Brent prices are unlikely to move higher unless there's a significant disruption in supply, he said, although prices have risen in the future months because of concerns about future output growth.
"Possibly for the first time in history, you've got geopolitical risks affecting long-term prices more than short-term prices which is obviously unusual," Keenan said.

Last week, Brent rose to a premium over immediate prices for the first time since 2012 on long-term supply concerns over tensions in Iraq, Libya and Ukraine.

Iraq's oil exports from the south remain at near record levels and the Kurdistan Regional Government's (KRG) oil pipeline via Turkey is operating normally and pumping 120,000 barrels per day (bpd) of crude oil despite an advance by Islamic State fighters in northern Iraq. "The Kirkuk pipeline was already down in March this year," Keenan said, adding that Kurdish crude oil exports via Turkey have largely remained unsold in the international markets. "So it's not really internationally available crude anyway," he said.

But the instability has prompted oil companies in Iraq and Iraqi Kurdistan to withdraw staff and raised doubts about whether Iraq will be able to raise output on the long run.

An increase in OPEC production in July has also weighed on prompt Brent. OPEC said the group managed to increase output in July despite violence in Iraq and Libya, pointing to more comfortable global supplies. The group also trimmed its 2014 global oil demand growth forecast for a second consecutive month.

U.S. crude futures remained supported, with immediate prices higher than those in future months, supported by low inventories at its delivery point in Cushing, Oklahoma. Cushing inventories fell to minimal operating levels after new pipeline capacities started diverting oil from Mid-west to the gulf coast earlier this year.

(By Florence Tan)

 

Maritime Reporter May 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Solarworld Wants Duties on Chinese Solar Goods in U.S. Extended

German solar manufacturer SolarWorld will apply to the United States for an extension of duties on Chinese panel imports that are due to end this year, weekly Euro am Sonntag said.

Sea Urchin Haven Disturbed by Oil Spill

Stephanie Mutz makes a living plucking sea urchins from the Santa Barbara coast and selling the prickly treasure to upscale restaurants in Southern California.

5 Tunisian Migrants Die in Shipwreck

At least five Tunisian migrants died on Saturday when their boat sailing to Italy capsized off the Tunisian coast, officials said. "A migrant boat carrying

Finance

Solarworld Wants Duties on Chinese Solar Goods in U.S. Extended

German solar manufacturer SolarWorld will apply to the United States for an extension of duties on Chinese panel imports that are due to end this year, weekly Euro am Sonntag said.

Sea Urchin Haven Disturbed by Oil Spill

Stephanie Mutz makes a living plucking sea urchins from the Santa Barbara coast and selling the prickly treasure to upscale restaurants in Southern California.

Viking Orders 2 Liebherr Cranes

An LR 1300 with super lift equipment and an LR 1160 crawler crane will strengthen the fleet of Viking Cranes. The Tallinn-based company with branch offices

Energy

Solarworld Wants Duties on Chinese Solar Goods in U.S. Extended

German solar manufacturer SolarWorld will apply to the United States for an extension of duties on Chinese panel imports that are due to end this year, weekly Euro am Sonntag said.

Red Tape, Industrial Relations Could Stifle LNG Potential

Australia could develop the world’s most technologically advanced LNG industry, according to a report by Accenture. But if industry is to reach its potential

Shell CEO Backs Fossil Fuels, Climate Change Warnings

The world's fossil fuel reserves cannot be burned unless some way is found to capture their carbon emissions, Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden said on Friday.

Fuels & Lubes

Sea Urchin Haven Disturbed by Oil Spill

Stephanie Mutz makes a living plucking sea urchins from the Santa Barbara coast and selling the prickly treasure to upscale restaurants in Southern California.

Red Tape, Industrial Relations Could Stifle LNG Potential

Australia could develop the world’s most technologically advanced LNG industry, according to a report by Accenture. But if industry is to reach its potential

Oil Leak Contained at MV Miner Site

On-site workers acted quickly to contain an oil leak during the final stages of removing the wreck of the MV Miner off Scaterie Island, says the government of Canada’s Nova Scotia province.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Salvage Ship Electronics Ship Repair Ship Simulators
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2367 sec (4 req/sec)