Oil dips on NY Ebola news

24 October 2014 – Brent reversed sharp overnight gains and fell towards $86 a barrel on Friday as investors’ risk appetite took a hit from news that a doctor in New York City tested positive for Ebola.

The first confirmed case in America’s largest city has renewed fears about the spread of the virus, prompting a tumble in US stock futures, while Asian shares also lost ground.

AMBULANCE WORKERS WEARING PROTECTIVE GEAR LOAD A PATIENT WITH POSSIBLE EBOLA SYMPTONS INTO THE BACK OF AN AMBULANCE AT THE HARVARD VANGUARD FACILITY IN BRAINTREE“Such news is not good for risk assets, with investors looking for a flight to safety. This could curb travel and that’s how it could feed through to the oil markets,” said Ben Le Brun, market analyst at OptionsXpress in Sydney.

“We could also be seeing some profit-taking after very strong overnight gains.”

The front-month contract of international oil benchmark Brent was down 61 cents at $86.22 a barrel early on Friday.

Brent settled $2.12, or 2.5%, higher on Thursday, its largest percentage gain in a day since 12 June. US crude for December delivery fell 70 cents to $81.39 a barrel, after closing $1.57 higher, its largest daily gain since 16 September.

Oil markets had risen sharply on news that crude supplies to the market from Saudi Arabia, the world’s top oil exporter, fell to 9.36 million barrels per day in September, down 328,000 bpd from August, according to an industry source.

This comes after Opec’s September world oil report that Saudi pumped 9.7 million bpd, up from 9.6 million bpd in August. The difference could be due to how much oil was put into storage.

Broadly stronger than expected economic data from the Eurozone also provided some support.

“Certainly this was the good news that the market was looking for after news on weakening demand. And I think with the majority of the market in a short position, any positive news will give a major reaction to the upside. It’s all over to the Opec meeting now,” Le Brun of OptionsXpress said.

The 12-member Opec will meet on 27 November to review its output target of 30 million bpd for the first half of 2015. So far, only a minority of members have called for an output cut, including Libya.

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