Oil to slip further

Dips below $97, set for third straight monthly loss



Brent crude slipped below $97 a barrel on Friday and headed for a third straight month of declines as rising supplies outweighed fears that US-led strikes against Islamist militants in Syria and Iraq could disrupt oil production.

Slowing economic activity in Europe and Asia has dampened demand for oil, while supply is on the rise.

Libya’s output has reached 9,25,000 barrels per day (bpd), the highest since militias turned on each other after the overthrow of Muammar Gaddafi. “At the moment, supplies are abundant and demand is weaker,” said Andrey Kryuchenkov, analyst at London-based VTB Capital. Brent for November delivery was down 9 cents at $96.91 a barrel by 1317 GMT. US crude rose 22 cents to $92.75 a barrel. Both contracts were heading for a third straight month of losses, with Brent also set to record its biggest monthly drop since April 2013 of over 6 per cent.

Oilfields hit

Air and missile strikes have hit oilfields in eastern Syria in an apparent attack by US-led forces against Islamic State militants, a monitoring group said on Friday. The military campaign gained momentum as French fighter jets joined those from the US, while Britain was seeking to join the US-led coalition.

But the global political risk premium for oil remained low as the coalition appeared united and was gaining ground against Islamic State, Kryuchenkov said.

Prices are likely to remain under pressure until European refineries return from maintenance in November and OPEC meets in Vienna on November 27 to consider whether to adjust its output target of 30 million bpd for early 2015, Kryuchenkov said.

The dollar’s recent rise against other currencies further weighed on demand for the greenback-priced commodity.

“There is a clear lack of any impetus to drive any price recovery ... The leading sentiment indicators that will be published in the middle of next week for the major economies look unlikely to remedy this,” Commerzbank said in a note.

Top oil exporter Saudi Arabia is likely to keep its output steady throughout the rest of the year as world consumption is expected to rise. Iranian oil minister Bijan Zanganeh called on OPEC members to “make joint efforts” to keep oil prices from falling further. — Reuters

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get





Related

This article is closed for comments.
Please Email the Editor