Brent drops towards $107 on better supply outlook

Joseph R. Fonseca
Friday, April 11, 2014

 Brent futures eased towards $107 a barrel on Friday as the global supply outlook improved with more Libyan supplies expected to reach the market, although growing tension between the West and Russia over Ukraine put a floor under prices.

 
Oil prices also came under pressure as producer-group OPEC said it sees lower demand for its oil this year, highlighting concerns over the economy and competition from rival producers, just as data from China showed imports fell to a five-month low.
 
Earlier in the week, United States said oil inventories rose on the back of a local production boom.
 
Brent crude fell 16 cents to $107.30 a barrel by 0340 GMT, after settling 52 cents lower. The contract is set to end the week 0.5 percent higher, recouping part of the previous week's losses. U.S. oil fell 23 cents to $103.17, but is set to end the week 2 percent higher.
 
"The markets will be softer from these levels as production growth will be faster than demand growth," said Ken Hasegawa, a commodity sales manager at Newedge Japan. "Investors are keeping an eye on the Ukraine situation, but the possibility of further upside in prices looks limited at this point."
 
Hasegawa sees very strong resistance for the U.S. benchmark at $105 a barrel and a rise to that level would prompt investors to sell and book profits, creating a possibility of a slide to $100. Similarly, $108.50 is a strong resistance level for Brent, and the benchmark may dip to $105 after touching that level.
 
The Organization of the Petroleum Exporting Countries (OPEC)in its monthly report on Thursday forecast demand for its crude oil in 2014 would average 29.65 million barrels per day, down 50,000 bpd from the previous estimate.
 
OPEC, which pumps more than a third of the world's oil, still expects world economic growth to be faster this year than in 2013, but it trimmed its projected expansion by 0.1 percentage points to 3.4 percent.
 
SUPPLY OUTLOOK, RISK
 
Libya's state National Oil Corp lifted force majeure for the eastern port of Hariga. That follows a deal Tripoli reached with a federalist group at the weekend to reopen two ports they were blocking for months. The federalists are still blockading the country's two biggest ports, Es Sider and Ras Lanuf, as well as Libya's largest oil refinery.
 
"Due to expectations of recovering exports from Libya, further upside in Brent is likely to be limited," Hasegawa said.
 
Despite expectations of rising supply amid a weak demand outlook, worries that a standoff between Russia and the West will turn for the worse underpinned oil prices.
 
President Vladimir Putin warned on Thursday that Russian gas supplies to Europe could be disrupted if Moscow cuts the flow to Ukraine over unpaid bills, drawing a U.S. accusation that it is using energy "as a tool of coercion".
 
In a letter to the leaders of 18 European countries, Putin made clear that his patience would run out over Kiev's $2.2 billion gas debt to Russia unless a solution could be brokered urgently. 
 
(Editing by Himani Sarkar)
 
Maritime Reporter May 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

Philippine, Vietnamese Troops Together on Disputed Island

Vietnamese and Philippine troops played soccer and sang karaoke on a South China Sea island on Wednesday in a sign of the growing security ties between the two

New MD for Glander Int'l Bunkering (India)

Glander International Bunkering is proud to announce that Ajay Menon has been appointed as the Managing Director of Glander International Bunkering (India) Private Limited.

ARENA Funding Helps CSIRO set-up New Solar Lab.

CSIRO is set to increase confidence in large scale solar by more accurately predicting how different solar photovoltaic (PV) systems will perform on Australian shores.

News

New Dry Bulk Facility at Khalifa Port

New AED 20 million facility will pack and transport dry bulk products for petrochemical and mineral manufacturers    Abu Dhabi Ports celebrated the groundbreaking

Port of Duluth Intermodal Project Underway

The U.S. Department of Transportation’s Maritime Administrator, Chip Jaenichen, today joined Senators Amy Klobuchar and Al Franken, Congressman Rick Nolan, Duluth Mayor Don Ness,

Chile Exporters Fret as Customs Strike Continues

A customs strike in Chile that began last week has started to affect exports and imports, although miners in the top copper producer said this week they have not yet been significantly impacted.

Middle East

Iran, Oman Discuss Yemen War, Settle Maritime Borders

Iran's Foreign Minister Mohammad Javad Zarif discussed how to advance Yemeni peace efforts with his Omani counterpart on Tuesday, Iranian media reported, on a visit

ASRY in Maritime Deal with Relay

UK-based engineering firm signs service agreement to provide direct services to vessels in ASRY, expanding the list of the yard’s onsite specialist contractors.

Baltic Mercur II makes maiden voyage to Antwerp

This week Atlantic Ro-Ro Carriers (ARRC) celebrates the maiden voyage of the Baltic Mercur II via the port of Antwerp as part of their regular transatlantic service to the US Gulf.

 
 
Maritime Careers / Shipboard Positions Maritime Security Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Ship Repair Ship Simulators Winch
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: 0.3926 sec (3 req/sec)