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

People & Company News

DSM Dyneema Names President’s Successor

Gerard de Reuver has elected to step down as President of DSM Dyneema on August 1, 2015 after five years in the post, the company announced today. He will be succeeded by Golnar Motahari Pour,

Matson Pumps $30 Million into Alaska Operations

Ocean cargo shipper Matson, Inc. said it is moving quickly to fund improvements in its new Alaska operations following its May 29 acquisition of Horizon Lines' Alaska services.

McMurdo Introduces Real-time Fleet Management

McMurdo  has announced PRISMA Connect, a web-based integrated fleet management system that connects ship to shore in real-time for improved communication and operational efficiencies,

Finance

Matson Pumps $30 Million into Alaska Operations

Ocean cargo shipper Matson, Inc. said it is moving quickly to fund improvements in its new Alaska operations following its May 29 acquisition of Horizon Lines' Alaska services.

General Dynamics Tops Q2 Estimates

General Dynamics Corp, a maker of ships, tanks and business jets, reported higher-than-expected quarterly earnings and revenues on Wednesday, and sharply raised its outlook for full-year profit.

Next Wave of FLNG Projects on the Horizon

There will be significant growth in both investment and activity in the FLNG market over the next seven years, with Douglas-Westwood (DW) forecasting total expenditure of $58.

Energy

Mexico to Postpone Deep Water Auction

Mexico, which has started to open its nationalized oil industry to additional private investment, will postpone auctions for deep-water oil exploration and production

Oregon Bridge Danglers Hope to Delay Shell's Arctic Drilling

Protestors rappelled off a bridge in Portland, Oregon on Wednesday hoping to delay Royal Dutch Shell's Arctic oil exploration this summer by blocking the return

Côte D’Ivoire Invests in O&G Safety Training

Thegrowth in oil and gas activity in Côte D’Ivoire has seen investment in standardized safety training in the region far outstrip that of other hydrocarbon-rich West African countries,

Fuels & Lubes

Côte D’Ivoire Invests in O&G Safety Training

Thegrowth in oil and gas activity in Côte D’Ivoire has seen investment in standardized safety training in the region far outstrip that of other hydrocarbon-rich West African countries,

Diesel Spill in Houston Ship Channel

A small section of the Upper Houston Ship Channel was closed Tuesday morning after a report of 1,000 gallons of diesel entered Greens Bayou from a cement facility, the U.

Singapore MPA Wants LNG Bunkering Options

Singapore's Maritime Port Authority is seeking proposals on liquefied natural gas bunker supplies as it shifts away from fossil fuels towards gas while trying to

 
 
Maritime Security Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Shipbuilding / Vessel Construction 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: 0.3314 sec (3 req/sec)