30 September 2014, News Wires – Brent crude futures edged back down towards $97 per barrel on Tuesday because of ample supplies, a lacklustre global economy and the strengthening of the dollar to a four-year peak against a basket of major currencies.
London Brent for November delivery was trading $0.09 lower at $97.11 per barrel by Tuesday morning, after rising $0.20 cents on Monday.
Oil prices on both sides of the Atlantic were on track for their third monthly loss in a row because there is ample supply in the market and demand in Europe and China remains tepid.
Brent has fallen nearly 6% this month and US crude around 2%.
Activity in China’s vast factory sector showed signs of steadying in September as export orders climbed, a private survey showed on Tuesday, easing fears of a hard landing but pointing to a still-sluggish economy facing considerable risks.
“It was in line with the consensus and shows that China’s economy continues to fluctuate,” Mitsubishi UFJ Research & Consulting senior economist Tomomichi Akuta told Reuters. “There’s not much of an impact on oil prices.”
Seasonal refinery maintenance on the US Gulf Coast will take out nearly 500,000 barrels per day of capacity at its peak next month, in line with the seasonal norm, but crude unit outages will ease quickly in November, according to IIR Energy.
Iran has urged OPEC members to make coordinated efforts to help stem the decline in oil, but that has highlighted a split with others in the oil producers’ group such as Saudi Arabia, which is playing down the price drop.
Providing some support, a strike has trimmed Libya’s oil output by 25,000 barrels a day to 900,000 bpd, a spokesman for state-run National Oil Corp said on Sunday, but production is still well up from a low of 200,000 bpd earlier in the year.
Brent’s premium over WTI narrowed to the smallest in 12 months on Monday, touching $2.57 per barrel.
“If Libya’s output continues to recover, the price differential would likely narrow, with the possibility of WTI becoming higher again,” Akuta said.
The market was waiting for weekly oil data from the American Petroleum Institute later in the day.
US commercial crude oil and distillate stockpiles were forecast to have increased in the week ended 26 September, while gasoline inventories probably fell, a preliminary Reuters survey of four analysts showed on Monday.