24 March 2014, News Wires – Brent crude held above $106 per barrel on Monday weighed down by a seasonal slump in demand and weak economic data from China, after posting its fourth weekly loss in a row on Friday.
Brent crude fell 17 cents to $106.75 early on Monday, after settling 47 cents higher at $106.92 on Friday.
US oil for May delivery dropped 23 cents to $99.23 after closing at $99.46 on Friday to pare some of the gains from fears of supply disruptions following sanctions against Russia, the world’s second largest oil producer.
“There is no real support for Brent. The market is coming back to Earth. I think the market is going to focus on supply. On balance the market is balanced to oversupplied,” said Tony Nunan, oil risk manager at Japan’s Mitsubishi.
A seasonal slump in demand has led to a near 5% price slide since the beginning of March, when Brent briefly jumped to a three-month high above $112 as Russia took control of Ukraine’s Crimea region.
While oil markets were coming off with the end of the severe winter weather in the northern hemisphere, there was continued concern over Libyan supply.
Rebels have occupied ports and oilfields, disrupting Libya’s oil production to less than 250,000 barrels per day, the state-run National Oil Corporation (NOC) said.
A pipeline problem further hit production at the southwesterly el-Feel oilfield to between 50,000 and 60,000 bpd from 80,000 bpd, NOC said on Sunday.
China’s purchasing manager’s index, which measures the country’s manufacturing activity, was still below 50 indicating a shrinking economy, Nunan said.
The flash Markit/HSBC Purchasing Managers’ Index (PMI) fell to an eight-month low of 48.1 in March from February’s final reading of 48.5. The preliminary March index showed new orders slid for a fourth consecutive month, to 46.9 — its lowest point since July 2013, while output fell to 47.3, the lowest since September 2012.