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

Contracts

Indonesia Expects Total to Decide on Mahakam within days

French oil firm Total  will decide how much interest it will retain from 2018 in Indonesia's offshore Mahakam oil and gas block over the next two days, the

G6 Alliance Extends Asia – North America Service

In response to market demand, members of the G6 Alliance today announced the below enhancement to improve the Asia – North America (East Coast) trade. NYK will

Stena RoRo Charters Three Vessels

Stena RoRo has reached an agreement with the Finnish shipping company Godby Shipping to long-term charter their three RoRo vessels Misida, Misana and Miranda.

Finance

Indonesia Expects Total to Decide on Mahakam within days

French oil firm Total  will decide how much interest it will retain from 2018 in Indonesia's offshore Mahakam oil and gas block over the next two days, the

Asia-N Europe Container Freight Rates Jumps 60%

Shipping freight rates for transporting containers from ports in Asia to Northern Europe rose by 60.4 percent to $879 per 20-foot container (TEU) in the week ended on Friday,

Stena RoRo Charters Three Vessels

Stena RoRo has reached an agreement with the Finnish shipping company Godby Shipping to long-term charter their three RoRo vessels Misida, Misana and Miranda.

Fuels & Lubes

CNOOC Acquires Asia's 1st LNG Powered Tug

China National Offshore Oil Corporation (CNOOC) has taken delivery of Asia’s first tugboat Hai Yang Shi You 525, designed to operate solely on liquefied natural gas as ship’s fuel.

Litgas, Statoil JV to Develop Baltic Sea LNG

Natural gas supply and trading company Litgas, part of Lithuania's state owned energy holding Lietuvos Energija, and Statoil, leading global energy company in oil and gas production,

Port Gothenburg Offering LNG

Ships running on liquefied natural gas (LNG) are going to be able to bunker at the Port of Gothenburg, as new regulations for LNG bunkering have been introduced

News

Indonesia Expects Total to Decide on Mahakam within days

French oil firm Total  will decide how much interest it will retain from 2018 in Indonesia's offshore Mahakam oil and gas block over the next two days, the

Asia-N Europe Container Freight Rates Jumps 60%

Shipping freight rates for transporting containers from ports in Asia to Northern Europe rose by 60.4 percent to $879 per 20-foot container (TEU) in the week ended on Friday,

Research Vessel Heincke: Serving Science for 25 years

7 July 2015. A quarter of a century old, with over 900,000 kilometres (488,842 nautical miles) logged and still on the cutting edge of science and technology:

People in the News

Aberdeen Pupils Peek into Subsea Oil & Gas Technology

Pupils at an Aberdeen primary school were given a rare insight into the depths of the oil and gas industry’s subsea sector after getting to sit in the driving

Search for Missing after Philippine Ferry Sinks, 38 dead

Divers will search waters in the central Philippines on Friday for 15 people still missing after a ferry carrying 187 passengers and crew sank a day earlier,

MOL Renames Group Ship Management Co.

Mitsui O.S.K. Lines, Ltd. announced today that effective July 2, its wholly-owned ship management company for dry bulkers, New Asian Shipping Company, Limited

Government Update

Caltex Replaces Australian Crew

The 36 Australian crew members of an Caltex tanker refusing to set sail after they were told their jobs would be gone after the next run. MR tanker Alexander Spirit (40,

Antwerp, Duisburg Ports to Upgrade Rly Link

The Port of Antwerp and duisport are intensifying their cooperation as the Port of Antwerp will participate in the existing rail shuttle service connecting the two ports.

Greek Shipping Mulls Cyprus Move

Greek shipping companies are looking into moving to Cyprus due to the instability and uncertainty in Greece, it emerged, reports Cyprus News Agency.   The director

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Port Authority Salvage Ship Electronics Ship Repair Ship Simulators 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: 0.2196 sec (5 req/sec)