02 May 2014 – Brent crude held steady below $108 per barrel on Friday, on track for its steepest one-week decline in four months, as rising supply from the US and Libya and muted demand outlook in China dragged down oil prices.
Brent crude held steady below $108 per barrel on Friday, on track for its steepest one-week decline in four months, as rising supply from the US and Libya and muted demand outlook in China dragged down oil prices.
Strong crude output in the US pushed inventories to another record high last week, while the global market could see more oil coming out of Libya as the government resumed operations at the eastern Zueitina port.
Investors are looking ahead to economic data from the US, the euro zone and China to gauge fuel demand outlook.
June Brent crude edged up $0.01 to $107.77 a barrel by Friday morning after settling on Thursday at its lowest close since 11 April.
US crude was at $99.47 per barrel, up $0.05, set to post a second weekly fall.
Some analysts also see an easing of the risk premium built into oil from the Ukraine crisis as investors turn their attention back to fundamentals.
“It’s the lowering of rhetoric out of eastern Europe over the course of this week,” CMC Markets chief strategist Michael McCarthy told Reuters.
“Supply is now starting to weigh on the complex and drag all of them down.”
US and European oil benchmarks tumbled mid-week after the US Energy Information Administration (EIA) released data showing a 1.7-million-barrel rise in US crude stocks to just shy of 400 million barrels last week.
In Libya, state-run National Oil Corporation said on Thursday that the Zueitina port was expected to load its first tanker of crude since reopening after nearly ten months.
“Supply-wise, it’s not so optimistic, because there is more concrete evidence of Libya coming back,” Phillips Futures analyst Tan Chee Tat told Reuters.
Investors are awaiting manufacturing data from the euro zone and non-farm payroll data from the US later on Friday.
On Monday HSBC will release its final survey on China’s factory activity in April.