Brent Slips Below $109 as Severe Winter Eases

MarineLink.com
Friday, February 28, 2014

By Manash Goswami, Reuters

Brent crude futures slipped on Friday below $109 a barrel on expectations demand growth will slow as severe winter weather eases, with supply worries keeping the losses in check for now.

A severe winter chill in the United States and Europe and supply disruption worries from the Middle East have supported oil in the early going this year, bucking broad weakness across other risk assets such as base metals.

But with weather patterns improving, crude prices are set to come under pressure as demand for heating fuels eases. Global oil supplies also look to be rising.

Brent crude fell 20 cents to $108.76 a barrel by 0519 GMT, after dropping 56 cents in the previous session. The contract is set to end the week down 1 percent, the most in four weeks; it has gained more than 2 percent in February.

U.S. oil dropped 46 cents to $101.94, and is set to end the week lower, snapping six straight weeks of gains in the longest winning spree in a year. WTI crude is up nearly 5 percent for the month.

"Oil is not reacting like other risk markets because of the winter and geopolitical tensions in the Middle East," said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin in Sydney.

"As the weather improves, some shine on that will come off. China's slowdown will compound it even more. The markets shouldn't be here."

The U.S. benchmark is set to slip to below $100 a barrel, Barratt said, adding the contract should ideally hold between $85-$90 a barrel, reflecting the current demand outlook.

Brent is at the upper end of its range now, he said, and the lower end of the range is $103, with support seen at $106.70.

Global spare oil production capacity inched higher in January and February as demand eased, the U.S. government said.

The Energy Information Administration said spare output capacity, which is the amount of oil that global producers can quickly bring on line without major investments - a key factor in global crude prices - averaged 2.1 million barrels per day in the last two months, or about 100,000 bpd higher than in the previous 60 days, the EIA said.

Supply Outlook

U.S. oil production surged in 2013 to the highest level in 25 years as a boom in shale drilling boosted output, the EIA also said.

Oil production for the year rose by nearly 1 million barrels per day (bpd), its largest-ever annual increase, to hit an output level of 7.46 million bpd, the highest since 1989, the agency said in a monthly report.

Prices are also under pressure on expectations of rising exports from Iran. The OPEC member's oil tanker fleet is gearing up for more business, with some vessels taking to the high seas after spending more than a year at home ports, in yet another sign an easing in sanctions is enabling exports to pick up.

Ship tracking sources said that in recent weeks at least three Iranian supertankers had made their first trips to Asia after months at Iranian anchorages where they were storing unsold oil.

(Editing by Tom Hogue)

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

Energy

Idreco Delivers Dredger for Hydro-Dam in Congo

Idreco (International Dredger Constructions) of the Netherlands informs it has designed, built and installed its second dredger, an ISD 600 with a digging depth of 30 meters,

Offshore Wind Shift to Drive Vessel Services Cooperation

Evolving procurement processes for U.K. Round 3 offshore wind farms will require a greater number of work streams, personnel with new and differing skills, and

Damen Delivers First Twin Axe FCS for O&G

Damen Maaskant Shipyards Stellendam have a decade-long relationship with the family-run Groen Offshore, Guard & Support, having built seismic research vessels and

News

Idreco Delivers Dredger for Hydro-Dam in Congo

Idreco (International Dredger Constructions) of the Netherlands informs it has designed, built and installed its second dredger, an ISD 600 with a digging depth of 30 meters,

BAE Systems Awards Software Contract to SENER

The Spanish company SENER, Ingeniería y Sistemas S.A has closed a contract with U.K.-based BAE Systems PLC for the integration between FORAN CAD/CAM System and

Hawboldt Secures Cape Sharp Tidal Winch Deal

A third Nova Scotian company has secured a multimillion dollar contract with the Cape Sharp Tidal project, which has potential to be the first grid-connected tidal array in the world.

Logistics

Egypt to Allow 24-hour Access to East Port Said with New Waterway

Egypt plans to allow smaller vessels in the Mediterranean direct access to East Port Said around the clock instead of just eight hours a day by building a side channel near the Suez Canal,

Offshore Wind Shift to Drive Vessel Services Cooperation

Evolving procurement processes for U.K. Round 3 offshore wind farms will require a greater number of work streams, personnel with new and differing skills, and

Work Begins on $1.6 bln Container Terminal at Jebel Ali Port

DP World Chairman Sultan Ahmed Bin Sulayem announced the start of construction work on a brand new container terminal at Jebel Ali Port, Dubai.   Phase 1 of the

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pod Propulsion Port Authority 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: 0.1513 sec (7 req/sec)