10 August 2013, News Wires – Brent crude climbed above $107 per barrel on Friday, after settling at its lowest in more than a month in the previous session, as further data from China added to early signs that the world’s top energy consumer may be stabilising.
Brent crude oil rose by $1 to reach more than $107 a barrel on Friday, driven by North Sea and Libyan supply disruptions and evidence that the economy of the world’s top energy consumer, China, was stabilising.
Concerns that delays to oil supplies in the North Sea as well unrest in Middle Eastern OPEC producers could persist or even worsen has boosted prices, analysts said.
US September crude prices rose 52 cents to $103.92 at 1230 GMT, breaking five days of losses, after trading as high as $104.59 mid-morning after a trade source said more North Sea Forties crude cargoes would be delayed due to an overnight pipeline closure that has slowed the output ramp-up of the Buzzard oil field.
Brent also jumped by $1 on the news about Britain’s biggest oil field to reach $107.68 after settling in the last session at its lowest level since 4 July. It quickly pared gains, however, to stand up 44 cents at $107.12 at 1230 GMT.
Adding to concerns over tightening supplies, a monthly report from the International Energy Agency suggested America’s shale oil boom was protecting the world from steep oil price spikes as several OPEC members struggle to maintain production due to unrest and infrastructure problems.
A monthly report from OPEC painted a similar picture.
“North Sea would not be such a problem if you did not also have disruptions in Libya and Iran… Then the market becomes more reactive on supply,” Olivier Jakob, oil analyst at Petromatrix said.
“Disruptions in Libya are coming to a point where you can compare them to sanctions on Iran… It is a combination of geopolitics and supply disruptions.”
Workers’ protests have already slashed Libya’s oil output to the lowest levels since the 2011 civil war and more than halved its exports.
Pipeline attacks in Iraq’s north have pushed output down and planned work at the southern terminals in September could slash exports by up to 500,000 barrels per day, the IEA said.
Although an imminent rebound for China is still unlikely, steady consumer inflation in July also offered some hope to markets already buoyed by strong trade numbers.
China’s commodity imports saw an overwhelming increase in July, with crude oil, iron ore and soybean shipments all climbing to record highs, although its implied oil demand softened from a four-month high in June.
“Stronger than expected Chinese data and continued supply issues are supporting prices,” Commerzbank analyst Carsten Fritch said.