08 July 2014 – Brent and US crude oil futures fell on Monday to the lowest levels in a month as Libya prepared to resume oil exports from two ports closed nearly a year, and as supply from Iraq remained unaffected by violence sweeping the Opec country.
Libya’s state-run National Oil Corp lifted a force majeure from the major eastern Ras Lanuf and Es Sider oil ports after rebels agreed last week to end a blockade.
Brent dipped 40 cents to settle at $110.24 a barrel, the lowest settlement since 11 June. Brent had climbed to a nine-month high of $115.71 in June amid the Iraqi crisis, but has since dropped more than 4%.
US oil lost 53 cents to settle at $103.53 a barrel, the lowest settlement since 6 June. It was the seventh straight daily decline, the longest in US oil since December 2009.
“The market continues to focus on geopolitical risk in Libya, Russia and Iraq. Brent and US crude will come under further pressure if Libya is successful in exporting oil,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
The two Libyan ports had been exporting about 500,000 barrels per day of crude, far below the 1.4 million bpd that the country pumped in the second quarter of last year, before protests started.
Brent’s premium over US oil narrowed to close at $6.71, down from a three-month high of $9.01 hit on 19 June.
Oil shrugged off news of a heavier-than-expected maintenance programme for North Sea oilfields in August, due to reduce loadings of crude from the four main export streams to 695,000 bpd from over 900,000 bpd in July.
This is the first time supplies of the four big North Sea oil streams have been below 700,000 bpd since 2010, according to Reuters data.
Weighing on US crude prices was a blow to the gasoline demand outlook from last weekend’s Tropical Storm Arthur, which dampened holiday travel in the US, analysts said.
“We’re halfway through the summer driving season. Demand wasn’t as strong (as expected), and the market is feeling more comfortable that we’re going to be well supplied,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Oil prices remained largely unaffected by positive US employment trends data released on Monday. The Conference Board’s Employment Trends Index, summarising eight employment-related indicators, rose 0.5% in June to 119.62, suggesting continued strong job growth.
*Luke Johnson – Upstreamonline