A Review of the Nigerian Energy Industry

Brent above $110

China's manufacturing growth22 May 2014, News Wires – Brent crude steadied near a 2-month high above $110 per barrel on Thursday, supported by a large draw in US crude stocks and signs of improvement in China’s manufacturing growth.

A preliminary HSBC survey showed China’s factory sector turned in its best performance in five months in May, suggesting a brighter outlook for demand in the world’s second largest oil consumer.

“This is positive for oil markets, because better-than-expected factory orders will increase demand for oil. And coupled with commentary from the Fed over night, oil prices will be supported for the time being,” OptionsXpress market analyst Ben Le Brun told Reuters.

Brent crude rose $0.03 to $110.58 per barrel by Thursday morning, just off a 2-month top of $110.73 reached in the previous session.

US crude eased $0.08 to $103.99 per barrel. The contract settled up $1.74 on Wednesday, its biggest one-day gain in six weeks.

Risky assets such as commodities were supported by minutes of the US Federal Reserve’s last meeting that reassured investors that policy makers will continue to support the economy.

Investors are now eyeing manufacturing numbers on Thursday from France, Germany and the Euro zone, as well as US weekly jobless claims for trading cues.

“If European flashes also come in stronger than expected, then we should see a very compelling and positive end to the week across oil markets,” Le Brun reportedly said.

Oil prices are currently drawing support from data showing a plunge in US crude stocks last week as imports slumped to the lowest since 1997 amid rising domestic production.

Crude inventories in the world’s biggest oil consumer fell 7.2 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations for an increase of 750,000 barrels.

Renewed fighting in Libya also drove up oil prices.

Explosions and heavy fighting with anti-aircraft guns could be heard near two military camps in Libya’s capital Tripoli on Wednesday, two days after gunmen had stormed parliament in the worst violence in months.

The country’s major western oilfields remain closed 10 days after the government said protesters blocking pipeline flows had agreed to leave, while total oil output edged higher, the National Oil Corp (NOC) said.

Only the small 30,000-barrels-per-day Wafa field was producing normally in the west, NOC said. Oil output in the OPEC-member was around 230,000 bpd, slightly higher than earlier this week at 210,000 bpd but well below the country’s 1.6 million bpd capacity.

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