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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Chevron Suffers Loss, Plans Job Cuts

Chevron Corp. reported a first-quarter loss as slumping oil prices continued to drag down revenue. The company said that it is "on target" to lay off a total of 8000 workers by the end of 2016,

China COSCO to be First through the Expanded Panama Canal

China COSCO Shipping has won the draw for its container vessel Andronikos to make the ceremonial first transit through the Expanded Panama Canal during the waterway’s inauguration on Sunday, June 26.

Sellick Equipment to Open New Facility

On April, 20, 2016, at the young age of 97 years, Walter Sellick along with sons Howard Sellick - President, David Sellick - Vice President and grandson Colin Sellick - Systems Manager,

Finance

Oil Price Bottoming Depends on Global Growth - IEA chief

International Energy Agency (IEA) chief Fatih Birol said on Sunday that oil prices may have bottomed but that would depend on global economic growth. Asked if oil prices had reached a bottom,

ExxonMobil 1Q Profits Plunge 63%

Highlights   * Earnings of $1.8 billion decreased 63 percent from the first quarter of 2015.   * Earnings per share were $0.43 assuming dilution.   * Cash

Shipping, Key Ingredient of EU’s Africa Agenda

The African economy has become one of the most promising global growth markets. Shipping is taking care of the largest part of international trade and in Africa

Energy

Oil Price Bottoming Depends on Global Growth - IEA chief

International Energy Agency (IEA) chief Fatih Birol said on Sunday that oil prices may have bottomed but that would depend on global economic growth. Asked if oil prices had reached a bottom,

Blacklisted Tanker Returns to Libya's Zawiya Port

A tanker that Libya's rival eastern government had been using to try to export oil in defiance of the Western-backed administration in Tripoli returned to the country on Saturday,

Lerwick Harbor sees Seasonal Boost

The opening of the offshore season in northern waters has seen specialist oil industry vessels return to Lerwick Harbor during April to support subsea development projects.

Fuels & Lubes

Oil Rally is Not Just About Hedge Funds: Kemp

Oil prices are becoming dangerously overheated as speculators anticipate a rebalancing of supply and demand that has barely started, according to many oil analysts.

Singapore Revokes Two Bunker Licenses

Singapore's Maritime and Port Authority (MPA) have revoked two bunker suppliers' license to operate in the world's top bunker port.    The two companies have,

Norwegian Escape Equipped with Alfa Laval Systems

Norwegian Escape, the first cruise ship in Norwegian Cruise Line’s new Breakway Plus Class, was delivered in October 2015. The 164,600 GT vessel, which boasts 19 decks and 4,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Sonar
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: 0.0930 sec (11 req/sec)