13 August 2014 – Brent crude slipped below $103 a barrel on Wednesday to trade near its lowest level in more than a year as ample supplies countered any disruption risks posed by lingering tensions in Iraq and Libya.
It was the fourth day of losses for the oil benchmark and comes after the International Energy Agency pointed to high supplies and even a glut in the Atlantic basin.
Opec output rose to a five-month high of 30.44 million barrels per day in July, as increased production from Saudi Arabia and Libya more than offset declines in Iraq, Iran and Nigeria.
September Brent crude slipped 22 cents to $102.80 a barrel early on Wednesday. The contract, which expires on Thursday, fell to as low as $102.65 on Tuesday, its weakest since 1 July, 2013.
US crude fell 17 cents to $97.20 a barrel, slipping for a second straight session.
Energy prices have retreated in view of Opec’s ability to ramp up production and the absence of negative news on supplies despite the political conflicts, said Ben Le Brun, markets analyst at OptionsXpress in Sydney.
The unrest in Iraq has yet to disrupt supplies from the second largest Opec producer even as the Obama administration has sent about 130 additional military personnel to Iraq as Washington seeks to help Iraq contain the threat posed by hardline militants from the Islamic State.
The immediate concerns for investors were upcoming Chinese data and retail sales in the United States, Le Brun said.
“The Chinese economic data due later in the session today should be a short-term driver for oil pricing,” said Le Brun.
A slew of Chinese data including industrial output and retail sales for July due out Wednesday should give further clues on the state of the world’s second largest economy and second largest oil consumer.
While recent data has pointed to strong manufacturing activity and exports, a weaker services sector and imports suggest more stimulus measures may be needed to ensure a sustained recovery.
China’s factory output likely grew by an annual 9% in July, compared with 9.2% in June, mainly due to a higher comparison base a year ago, according to a Reuters poll of analysts.
In the US, the Energy Information Administration will release its weekly crude stockpiles report. The agency said on Tuesday that US crudeproduction had averaged an estimated 8.5 million bpd in July, the highest level since April 1987.
Data from industry group American Petroleum Institute showed that US crude inventories had risen 229,000 barrels in the week to 8 August to 364.2 million, in contrast with analysts’ expectations for a decrease of 2 million barrels.