Crude Falls Below $114 as Iraq Supply Fears Ease

Posted by Michelle Howard
Monday, June 23, 2014
U.S. Secretary of State John Kerrylanded in Baghdad on Monday. (Photo: http://www.state.gov)
  • Sunni insurgents capture three towns in Iraq's Anbar
  • Iraq's oil exports near record rates in June
  • U.S. Secretary of State John Kerry lands in Baghdad

 

Brent crude dipped below $114 a barrel on Monday as worries about disruptions to Iraqi crude supplies began to look overdone given that exports have so far been unaffected by a Sunni Islamist insurgency.

Brent was down 90 cents at $113.91 by 1336 GMT, off an intraday high of $115.66. U.S. crude for August delivery was down 54 cents at $106.29, after touching $107.45 earlier in the session. The July contract expired on Friday.

Traders and analysts said that the rally had faltered as the market was becoming desensitised to the news out of Iraq. Although insurgents made further gains at the weekend Iraq's crude exports have not yet been slowed by the conflict.

"There is some bailing (out) going on," a futures broker said. The latest ICE Brent data showed that speculators had raised their net long positions to their highest level since September 2013 last week. Traders and analysts suggested some were now taking profits.

Data showed that Iraq's oil exports from its southern terminals are near record rates so far in June at around 2.53 million barrels per day, despite the Sunni insurgency.

"The supply news isn't really supporting oil prices - the only thing supporting them is the fear factor," said Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt. "This reminds me of the Syrian conflict when the market spiked on worries about supply disruptions that never happened."

Militants from the Islamic State of Iraq and the Levant (ISIL) seized three towns in Iraq's western Anbar province after taking control of two frontier crossings on the Iraq-Syrian border at the weekend.

Sunni tribes also took control of a border crossing between Iraq and Jordan late on Sunday after Iraq's army pulled out of the area following a clash with rebels.

Meanwhile, there was a lull in fighting at Iraq's largest refinery, the 300,000 barrel-per-day Baiji complex, on Sunday, although militants still surround the plant.

The deterioration of the situation in Iraq pushed Brent futures to $115.71 a barrel last Thursday, the highest level since September 9, 2013.

But some said the oil price had run ahead of the facts. Commerzbank's Fritsch pointed out that about 90 percent of Iraqi crude exports are shipped from export terminals in the south of the country, which are unlikely to be reached by the Sunni insurgents.

In addition, the Kurds continue to export oil from Iraqi Kurdistan with a third tanker departing Turkey's Mediterranean port of Ceyhan on Monday, whilst a fourth tanker is being loaded.

This week the market is likely to focus on the response from the United States to events in Iraq, and whether the insurgents will start to meet greater resistance.
 
U.S. Secretary of State John Kerrylanded in Baghdad on Monday to press Prime Minister Nuri al-Maliki to form a more inclusive government and to discuss U.S. actions to assist Iraq.

(By Claire Milhench, Additional reporting by Keith Wallis in Singapore; editing by Jason Neely and Keiron Henderson)

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

Contracts

Ezra Bags $70m in Offshore Contracts

Ezra Holdings Limited, a leading contractor and provider of integrated offshore solutions to the oil and gas industry, today announced that the Group’s Subsea Services division,

Clean Marine Wins New Contract

Clean Marine has been selected by Hyundai Mipo Dockyard in South Korea to supply exhaust gas cleaning systems (EGCS) for two new MR tankers. IMO’s convention

Liebherr to Deliver RTGs to Mayotte and Manila

Liebherr confirms orders for variable speed RTGs and electric RTGs. DPWorld Asian Terminals Inc. has placed an order with Liebherr Container Cranes for a further 5 RTGs at its Manila facility.

Energy

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

Areva-Siemens Raises Claim Over Finnish Reactor Delays

The French-German consortium Areva-Siemens , the supplier of Finland's much-delayed Olkiluoto-3 nuclear reactor, has increased its claim against Finnish utility Teollisuuden Voima (TVO),

16 Die in Coal Mine Accident in China

Sixteen workers were killed after a coal mine collapsed in China's far western region of Xinjiang, the official Xinhua news agency reported on Saturday, highlighting

Fuels & Lubes

Clean Marine Wins New Contract

Clean Marine has been selected by Hyundai Mipo Dockyard in South Korea to supply exhaust gas cleaning systems (EGCS) for two new MR tankers. IMO’s convention

U.S. Navy Contracts 12 Rapid Response Skimmers

Kvichak Marine won a US Navy contract for 12 30-ft.Rapid Response Skimmers (RRS) for delivery over the next 18 months, with options for up to 30 additional skimmers to be delivered through 2019.

UASC Targets Expansion to Beat Container Market Blues

UASC expects to reach volume of 2.35 mln TEU in 2014 Global carriers still struggling with weak conditions United Arab Shipping Company (UASC) is on a major expansion drive,

News

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

USCG to Ensure Safety During World Series

The Coast Guard and local agencies are working to ensure the safety of boaters and baseball fans during World Series games at AT&T Park this weekend. The

Areva-Siemens Raises Claim Over Finnish Reactor Delays

The French-German consortium Areva-Siemens , the supplier of Finland's much-delayed Olkiluoto-3 nuclear reactor, has increased its claim against Finnish utility Teollisuuden Voima (TVO),

People in the News

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

USCG to Ensure Safety During World Series

The Coast Guard and local agencies are working to ensure the safety of boaters and baseball fans during World Series games at AT&T Park this weekend. The

16 Die in Coal Mine Accident in China

Sixteen workers were killed after a coal mine collapsed in China's far western region of Xinjiang, the official Xinhua news agency reported on Saturday, highlighting

Government Update

Navy to Commission Submarine North Dakota

The Navy will commission its newest attack submarine North Dakota, during a ceremony Saturday, Oct. 25, 2014, at Submarine Base New London in Groton, Connecticut.

MARAD Seeks Comments on Proposed Policy for Deepwater Export Applications

The Maritime Administration (MARAD) is seeking comments on the agency’s proposed policy to accept, evaluate and process license applications for the construction

Oil Drillers Group to Fight U.S. Export Ban

More than a dozen U.S. oil producers have joined to lobby the federal government to reverse the 40-year-old ban on U.S. crude exports, a move that supporters hope

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Offshore Oil Pod Propulsion Port Authority 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: 0.1402 sec (7 req/sec)