BUSINESS - ECONOMY
| 2013-08-07Brent slips towards US$108 as supply fears ease
BRENT futures slipped towards US$108 a barrel yesterday as supply fears from key exporters such as Libya eased, but losses were stemmed with a forecast fall in crude inventories in the world’s largest oil consumer the United States.
Libya’s Oil Minister Abdelbari al-Arusi said output had improved and the government was working to end protests at oil facilities.
His comments followed Iranian President Hassan Rouhani signalling a willingness to improve relations with the West and end a dispute over Tehran’s nuclear program, assuring investors that supply fears from key exporters were abating.
Brent crude slipped 26 cents to US$108, 46 by in early trading, sliding for a third day in its longest losing streak since end May. US oil fell 21 cents to US$106,35 after ending 38 cents down. It is also down for a third straight day.
“Oil prices are pretty expensive at these levels and I doubt we will see them going much higher from here. They are more likely to trade sideways,” said Tony Nunan, a risk manager at Mitsubishi Corp. “Some economic numbers out of the United States seem to suggest the US is slowing growing. That, and recent supply fears, have helped support prices.”
Nunan expects US$109 to be the next key resistance level for the US benchmark and US$110 for Brent.
Brent rose nearly 10% in about six weeks, touching US$110, 09 on Aug 2, the highest since early April, in part due to worries over supply from major exporters such as Libya and Iraq. Prices have begun coming off after Rouhani’s comments and as supply worries abate.
“Those outages and supply worries from the Middle East and Africa have provided support to oil,” Nunan said.
Brent is expected retest a support at US$107,40, with a good chance of breaking below this level and falling further, while US oil is expected to retest a support at US$105, 75, according to Reuters technical analyst Wang Tao.
Yet, further losses were checked on expectations US commercial crude and gasoline stockpiles fell last week, a preliminary Reuters poll showed.
Libya’s Oil Minister Abdelbari al-Arusi said output had improved and the government was working to end protests at oil facilities.
His comments followed Iranian President Hassan Rouhani signalling a willingness to improve relations with the West and end a dispute over Tehran’s nuclear program, assuring investors that supply fears from key exporters were abating.
Brent crude slipped 26 cents to US$108, 46 by in early trading, sliding for a third day in its longest losing streak since end May. US oil fell 21 cents to US$106,35 after ending 38 cents down. It is also down for a third straight day.
“Oil prices are pretty expensive at these levels and I doubt we will see them going much higher from here. They are more likely to trade sideways,” said Tony Nunan, a risk manager at Mitsubishi Corp. “Some economic numbers out of the United States seem to suggest the US is slowing growing. That, and recent supply fears, have helped support prices.”
Nunan expects US$109 to be the next key resistance level for the US benchmark and US$110 for Brent.
Brent rose nearly 10% in about six weeks, touching US$110, 09 on Aug 2, the highest since early April, in part due to worries over supply from major exporters such as Libya and Iraq. Prices have begun coming off after Rouhani’s comments and as supply worries abate.
“Those outages and supply worries from the Middle East and Africa have provided support to oil,” Nunan said.
Brent is expected retest a support at US$107,40, with a good chance of breaking below this level and falling further, while US oil is expected to retest a support at US$105, 75, according to Reuters technical analyst Wang Tao.
Yet, further losses were checked on expectations US commercial crude and gasoline stockpiles fell last week, a preliminary Reuters poll showed.
