Brent Holding at $107 on U.S. Crude draw, Russia Sanctions

Posted by Joseph Keefe
Thursday, July 17, 2014

U.S. crude stockpiles down 7.5 mln barrels last week; Chinese economic growth quickens to 7.5 percent in Q2. Washington slaps toughest sanctions yet on Russia.

Brent oil held above $107 a barrel on Thursday with a sharp drop in U.S. crude stockpiles boosting the demand outlook in the world's top oil consumer while tougher U.S. sanctions on Russia raised geopolitical concerns.

Continued worries about the political situation in Libya and Iraq also underpinned oil prices.

Brent for September, which became the front-month contract on Thursday, rose 51 cents to $107.68 by 1021 GMT. The August contract, which expired on Wednesday, dropped 17 cents to settle at $105.85 a barrel.

U.S. crude known as WTI, which is sensitive to domestic inventory data, climbed $1 to $102.20 a barrel before paring some gains to remain above $102.

"There were stock draws in the United States, which is why WTI is up more than Brent. There is also the issue of Russian sanctions," said Christopher Bellew, trader at Jefferies Bache.

"But I'm not certain Brent will stay here too long because we are in a contango," he said, referring to a market structure where future prices are seen higher than the front month, encouraging traders to store volumes and wait for price rises.

Oil prices have been on the increase after data released on Wednesday showed a larger-than-expected drawdown in overall U.S. stockpiles and at the Cushing, Oklahoma delivery hub.

A rise in U.S. refining activity caused crude stocks to fall by 7.5 million barrels last week, the biggest draw since January and larger than the 2.1 million drawdown forecast by analysts, data from the U.S. Energy Information Administration showed.

At the same time, geopolitical tensions are on the rise with Russia facing tougher sanctions over the situation in Ukraine, where 11 soldiers were killed on Wednesday as government forces battled pro-Russian separatists.

Rosneft, Russia's largest oil producer, was among firms targeted by further U.S. sanctions announced on Wednesday while Europe agreed to impose its own package.

DOWNWARD PRESSURE?

Oil prices had been in a downward trend since Brent hit a nine-month high of $115.71 on June 19 after Islamist insurgents took control of swathes of northern and eastern Iraq.

Fighting has continued, but initial fears that it would have a large impact on the country's oil exports have eased. Iraq's southern oilfields are set to export 2.6 million bpd in July, the same as May and the highest since 2003.

Traders said that Brent was likely to resume its downward trajectory as market fundamentals pointed to plentiful supplies.

"There are ample supplies of crude augmented by exports of condensates from the United States," Bellew said.

Michael McCarthy, chief market strategist at Sydney's CMC Markets, also predicted that prices could trend lower in the absence of further political developments or market-moving data with U.S. crude testing technical support at $98.50 and Brent at $102.50 a barrel.

Investors are keeping an eye on geopolitical tensions for further trading cues, however.

In Libya, oil exports through its two largest eastern ports, capable of shipping 500,000 bpd, will not start before August, an official said on Wednesday.

China posted slightly better-than-expected economic growth of 7.5 percent in the second quarter, government data showed on Wednesday, boosting the demand outlook.

"The economy in the U.S. is on track to grow. The Chinese economy increased a bit - the growth figures were slightly higher so some support for oil is coming in from the demand side," said Avtar Sandu, senior commodities manager at Singapore's Phillip Futures.


By Lin Noueihed and Keith Wallis

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

People & Company News

Transas: The Bridge to Tomorrow

Transas was founded in 1990, by a group of former navigators and engineers, who at that time envisioned ways in which computers could revolutionize maritime safety, communications and security.

ZF Celebrating 100th Anniversary

2015 marks the 100th anniversary of the foundation of ZF Friedrichshafen AG   Zahnradfabrik GmbH was founded in 1915, and through a 100-year history has developed

Signal Ship Repair Achieves OSHA Milestone

Signal International announced that on December 31, 2014, the Signal Ship Repair Operations located in Mobile, Alabama achieved one full year and worked 387,926 manhours,

Tanker Trends

US House Passes Bill to Pressure Regulators on LNG Exports

The U.S. House of Representatives passed a bill on Wednesday to speed permits for exports of natural gas, a measure that even if passed by the Senate and signed into law by President Barack Obama,

DSME Building 5 Icebreaking LNGCs for Yamal

Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) is building five large Arctic Liquefied Natural Gas Carriers (LNGCs), for which it has LNG ordered

Bomb Threat Cut Lithuania LNG Terminal Output

Gas supply from Lithuania's liquefied natural gas (LNG) import terminal was interrupted on Wednesday due to a bomb threat that later turned out to be a hoax, the

Fuels & Lubes

GTT to Exhibit at Euromaritime

Gaztransport & Technigaz (GTT), a designer of membrane containment systems for the maritime transportation and storage of liquefied natural gas (LNG), will exhibit at Euromaritime,

International Sulphur Campaign Launched

An international information campaign on the new, stricter sulphur requirements and their enforcement will be launched in February and, at the same time, cooperation

Sweden-Poland Maritime Link Improved

The EU's TEN-T Program will co-fund with over €2 million the development of the sea ports of Trelleborg (Sweden) and Świnoujście (Poland), to increase their competitiveness and sustainability,

Maritime Security

Libya Returns Fuel Tanker to Rival Government

Libya's recognized government has released a tanker forced to dock at a port under its control after originally banning it from delivering fuel to its rival administration,

Blue Sky Network Updates SkyRouter Web Portal

Blue Sky Network (BSN), a global provider of satellite tracking and fleet management solutions for land mobile, maritime and aviation assets, announced upgrades

Tanker with Kurdish Crude Leaving U.S. After 6-month Dispute

After being stuck in legal limbo for six months, a tanker loaded with 1 million barrels of Kurdish crude headed east on Tuesday to leave U.S. waters after Baghdad

News

Shepler’s New Ferry Takes Shape

Sparks are flying on the bulkhead and engine room of the $3.8 million, 85-foot Miss Margy, the newest addition to the Shepler’s Mackinac Island Ferry fleet, at Moran Iron Works.

LEEVAC Launches First PSV for Tidewater

On Tuesday, January 27, LEEVAC Shipyards Jennings, LLC launched hull 367, a platform supply vessel (PSV) designed by LEEVAC Design Services, LLC (300 DE-52 HAB PSV).

Puget Sound Container Volumes Flat in 2014

Container volumes through Puget Sound’s largest container ports remained flat in 2014, according to numbers released jointly for the first time by the ports of Seattle and Tacoma.

People in the News

New Iranian Ambassador Visits IMO

Mohammad Hassan Habibollahzedeh, the new Ambassador and Permanent Representative of the Islamic Republic of Iran to IMO, visited IMO Headquarters January 28.   There,

Fugitive Treasure Hunter Arrested in Florida

An Ohio man who recovered as much as $400 million in gold from a shipwreck has been arrested in Florida after two years on the run and was scheduled to appear in federal court on Wednesday.

WCI to Honor Sens. Alexander and Vitter

Waterways Council, Inc. (WCI) to honor Senator Lamar Alexander and Senator David Vitter with Leadership Service Awards; Washington Meetings and Waterways Seminar

Government Update

US House Passes Bill to Pressure Regulators on LNG Exports

The U.S. House of Representatives passed a bill on Wednesday to speed permits for exports of natural gas, a measure that even if passed by the Senate and signed into law by President Barack Obama,

New Iranian Ambassador Visits IMO

Mohammad Hassan Habibollahzedeh, the new Ambassador and Permanent Representative of the Islamic Republic of Iran to IMO, visited IMO Headquarters January 28.   There,

WCI to Honor Sens. Alexander and Vitter

Waterways Council, Inc. (WCI) to honor Senator Lamar Alexander and Senator David Vitter with Leadership Service Awards; Washington Meetings and Waterways Seminar

P&I Clubs

ZIM Launches Monitoring and Tracking Service

ZIM integrated shipping services has announced the launching of a new monitoring, tracking and security services package, specifically designed for valuable and

Oil Tankers are Front Line of Libya's Struggles

Crew members killed in tanker attack this month; West fears worsening violence could lead to civil war. Oil shippers face higher costs and the possible loss of insurance cover on Libyan voyages,

26-year Jail Term Sought for Concordia Master

An Italian prosecutor asked a court on Monday to sentence the captain of the Costa Concordia cruise liner to more than 26 years in jail for his role in the 2012 disaster that killed 32 people.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Offshore Oil Salvage Ship Electronics Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2447 sec (4 req/sec)