LONDON: Brent oil held steady above $109 a barrel yesterday as unrest and low output in Opec exporter Libya offset downward pressure from expectations of a weekly build in US crude stocks to a record high.
Libyan output has dwindled to about 210,000 barrels per day (bpd), far below pre-crisis levels closer to 1.4 million bpd, with western fields still shut after the government said it had reached a deal with protesters to reopen them.
Brent crude was down 16 cents at $109.21 a barrel at 1330 GMT, having reversed gains made earlier in the session.
US crude for June delivery was 29 cents lower at $102.32 a barrel. The contract expired yesterday. US crude for July delivery was down 18 cents at $101.93 a barrel.
“It failed to hold over $110 yesterday and there has been no further deterioration in Libya ... We are in a broad range of $105-$110,” said Christopher Bellew, a trader at Jefferies Bache.
“The situation in Libya is essentially not a major change, and it leads me to believe that if Libya was exporting as much as it could, we would be closer to $105.”
French oil major Total said on Monday it had cut its presence in Tripoli to a minimum due to security concerns following weekend clashes and an attack by a renegade general on parliament. Algerian state energy firm Sonatrach is also evacuating workers.
“The latest events have no doubt quashed any hopes of oil production rising noticeably from its current level of a good 200,000 barrels per day,” Commerzbank said in a research note.
US commercial crude stocks were expected to have risen by 1 million barrels in the week to May 16, a preliminary Reuters poll of four analysts showed.
That would take crude inventories to a new record after inventories hit 399.4 million barrels in the week to April 25, the highest since the US government’s Energy Information Administration (EIA) began collecting such data in 1982.
Reuters
