Brent heads for second losing week 

oil barrels20 September 2013, News Wires – Brent crude is on course for a second consecutive weekly loss despite gains in London on Friday, as the mid-week exuberance inspired by the US Federal Reserve failed to maintain its momentum.

Both Brent and WTI increased strongly on Wednesday after the Fed’s surprise decision to stand firm on its economic stimulus, but gave back a good portion of the gains on Thursday as traders took profits and the dollar strengthened.

A series of bearish indicators, including the return of some Libyan production and conciliatory words from Iran and Syria, also suppressed prices.

On Friday, Brent crude for November delivery rose 61 cents to $109.37 a barrel on ICE Futures Europe by 1015 GMT.

Brent is now nearly 7% below the 28 August high of $117.34 reached at the peak of the Syrian crisis.

US crude oil futures were up eight cents at $105.94 for October and down 24 cents at $106.15 for November.

Iran’s President Hasan Rouhani will address the United Nations in New York next week, after a concerted public relations campaign that hints of a return to dialogue over its contentious nuclear programme.

VTB Capital’s Andrey Kryuchenkov told Dow Jones Newswires the risk outlook for Iran was looking more promising.

Economics is influencing Tehran’s foreign policy, given a significant reduction in oil import revenues, he said, but whatever happens “this doesn’t mean we shall see an immediate lift to sanctions and Iranian crude imports will resume at levels seen in early 2011”.

The Schork Report was more succinct in its appraisal of Rouhani’s pledge to give up its nuclear ambitions, saying “we would have to be smoking crack to believe this nonsense”.

In Syria, where the risk of violence spreading into the region has helped support oil prices, the government has reportedly called for a ceasefire in the country’s civil war. A deadline for Syria to disclose details of its chemical arms is this weekend.

With supply risks abating, attention is turning to the supply surplus, said Commerzbank.

Along with returning production in Libya, where 400,000 barrels a day have come back on stream in the last week, exports from OPEC member states are on the rise, particularly Saudi exports.

“Brent is now trading only a good $1 above the five-and-a-half week low it hit mid-week,” Commerzbank said in a note to clients. “And why shouldn’t this be the case? After all, the ultra-expansionary monetary policy pursued by the US Federal Reserve does nothing to eliminate the supply surplus on the oil market.”

On Friday morning the ICE’s gasoil contract for October delivery was down $4.50 at $930.00 a metric ton, while Nymex gasoline for October delivery was up 149 points at $2.7121 cents a gallon.

– Upstream

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