Brent edges up on South Sudan fears

North Sea, Brent crude oil25 December 2013, News Wires -Brent crude edged up a barrel on Tuesday as conflict in South Sudan chopped 18% of its oil output at a time when production cuts in Libya are already curbing supply.

Traders also kept watch on a strike at three of Total’s oil refineries in France, where workers voted on Tuesday to extend their 12-day-old strike for at least another 48 hours.

The strike has kept a third of the country’s refining capacity idle, but the French oil major said there was no risk of short-term fuel shortages.

Brent rose 47 cents to $112.03 a barrel by 1500 GMT before dropping back to $111.85 by 1600 GMT, up 29 cents, while WTI climbed 22 cents to $99.13. NYMEX trading was to close an hour early on Tuesday.

South Sudan’s production has fallen by 45,000 barrels per day (bpd) to 200,000 bpd after oilfields in Unity state shut down due to fighting with fears the conflict could further escalate and see more output shut in.

“As the year comes to a close, the risk of an all out civil war that could stymie the country’s production of around 250,000 barrels a day is growing,” said a JBC Energy report.

The disruption to Sudanese oil supply adds to Libya’s production cut of more than 1 million barrels per day as its key oil ports stay shut.

Despite the violence and tensions in Africa, Brent is on track to close flat this year from 2012 amid a well-supplied market and slower fuel demand growth in China, despite outages in Iraq, the North Sea and Libya.

WTI is up 7.5% for the year, narrowing its gap with Brent which widened to almost $20 earlier this year, as more pipelines diverted oil away from the contract’s delivery point in Cushing, Oklahoma, reducing a supply glut.

Traders will be scouring US oil inventories data to gauge supply.

US crude oil stockpiles likely fell for the fourth straight week last week, while gasoline inventories saw a preliminary rise, a Reuters poll of analysts showed on Monday.

The API will release its data late on Tuesday while the EIA will publish its data on Friday.


– Upstream












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