26 March 2014, News Wires – Brent crude futures rose above $107 per barrel on Wednesday amid a disruption in supply from Nigeria and Libya, while promising data from top consumer the US also supported prices.
But easing worries over Ukraine – after the US President and his allies agreed to hold off on more damaging economic sanctions against Russia, the world’s top oil producer, unless Moscow goes beyond the seizure of Crimea – kept a lid on crude price gains.
Brent crude for May delivery rose 21 cents to $107.20 early on Wednesday, after closing up 18 cents in the previous session. US oil climbed 20 cents to $99.39 a barrel, partly reversing Tuesday’s losses of 41 cents.
“Nigeria, because it’s light crude, may have more effect on Brent which is holding up over WTI,” said Jonathan Barratt, chief executive of Sydney-based commodities firm Barratt’s Bulletin. There was less impact from supply disruptions in Libya “which I feel is relatively contained”, Barratt added.
Shell declared force majeure on Nigeria’s Forcados crude exports due to a pipeline leak caused by oil theft, while Libyan output fell by about 80,000 barrels per day to about 150,000 bpd after a large oilfield was shut.
Shell has not said when repairs would be completed but that it would reopen the export line as soon as possible.
Oil prices also drew support from US data showing consumer confidence rose more than expected in March, climbing to its highest level since January 2008, and house prices increased solidly in January.
The US benchmark, or the West Texas Intermediate (WTI), is however seeing a short-term rally, traders and analysts said, adding that an expected build in the country’s crude stockpiles for a tenth straight week could drag on prices.
“An oil spill in the Galveston Harbour has kept the Houston Shipping Channel closed since the weekend, and provided a temporary floor for WTI,” ANZ Research said in a note.
The channel is expected to fully reopen on Wednesday after its closure led to cuts in production at the second-largest refinery in the United States.
US oil prices had briefly risen above $100 on Tuesday, but fell after data from the American Petroleum Institute showed a higher-than-expected build in crude inventories.
US oil stocks surged by 6.3 million barrels in the week to 21 March to 379 million, API data showed, versus analysts’ forecasts of a 2.7 million barrels increase.
The Energy Information Administration (EIA) will release its inventory data later in the day.
Iraq’s oil exports are forecast to have fallen to just over 2.5 million barrels per day in March from 2.8 billion bpd in February, according to Reuters data and analyst forecasts.