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 June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

Marseilles Fos Reports Mixed First Half

First-half container traffic at leading French port Marseilles Fos totalled 583,287 teu – up 7% on the first six months last year - marked by a 10% increase at the deepsea Fos terminals.

ABS to Class the World's First CNG Ship

ABS announced it has been chosen to class the world's first compressed natural gas (CNG) carrier ordered by Pelayaran Bahtera Adhiguna, a subsidiary of Indonesia's

Prelude By the Numbers

Out at sea, look! It’s a ship! It’s a floating rig! It’s SuperFLNG! While not “faster than a speeding bullet,” Shell’s shipzilla Prelude is certainly more powerful than a speeding locomotive,

Energy

Prelude By the Numbers

Out at sea, look! It’s a ship! It’s a floating rig! It’s SuperFLNG! While not “faster than a speeding bullet,” Shell’s shipzilla Prelude is certainly more powerful than a speeding locomotive,

FLNG Prelude: A New Dawn in the Age of Maritime & Energy

Longer than four football fields, as big as six Nimitz-class aircraft carriers and almost as tall as the Taipei 101 skyscraper, Royal Dutch Shell PLC is hoping that its record-setting,

Valemon Topsides Installed

On Monday, July 28, the topsides were lifted into place on the steel jacket on the Valemon field in the North Sea. Produced by Samsung Heavy Industries this is

News

HMS Prince of Wales Delivery Begins

A huge section of hull for HMS Prince of Wales, the second aircraft carrier being delivered to the Royal Navy, has today departed BAE Systems in Glasgow on a 600-mile

Gondan to Build Spanish Patrol Boats

Gondan Shipyard has recently signed a contract with the Guardia Civil, Spain’s Civil Guard, for the building of two patrol boats. The aluminum and fiber (PRFV ) vessels will measure 20.

Marseilles Fos Reports Mixed First Half

First-half container traffic at leading French port Marseilles Fos totalled 583,287 teu – up 7% on the first six months last year - marked by a 10% increase at the deepsea Fos terminals.

Logistics

Marseilles Fos Reports Mixed First Half

First-half container traffic at leading French port Marseilles Fos totalled 583,287 teu – up 7% on the first six months last year - marked by a 10% increase at the deepsea Fos terminals.

Evergreen Enhances UK and Ireland Services

Global container carrier Evergreen Line announced enhancements to its services to/from Dublin (Ireland) and Liverpool (Northwest England). From its hub in Rotterdam,

Private Buyers in Iran Look to Boost Grain Market

One sign of change in Iran as it works toward a nuclear deal with world powers is the way it is feeding itself, with private grain firms beginning a slow return

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Pipelines Ship Repair Ship Simulators Sonar Winch
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: 0.1725 sec (6 req/sec)