NEW YORK: Brent crude oil pared early losses yesterday to trade back toward $109 a barrel as selling pressure eased after a report showed strong growth in the US economy’s service sector.
Brent and UScrude each lost more than $1 earlier in the session on news of rebounding production in Libya and the North Sea and disappointing eurozone data showed an across-the-board drop in retail sales for the first time in three months. But both benchmarks rebounded after the Institute for Supply Management (ISM) report reported the pace of growth in the US service sector surged to a five-month high in July.
“The market turned after the services number came out,” said Gene McGillian, an energy analyst at Tradition Energy in Stamford, Connecticut. “Our little selloff was a continuation of profit-taking generated from last week’s disappointing employment report and the Libyan export terminal coming back online, but it didn’t really attract a lot of sellers.”
By 1:14 pm EDT (1714 GMT), Brent was down 15 cents per barrel to $108.80 after earlier dropping as much as $1.40 to $107.55. US crude oil futures lost 11 cents to $106.83, after earlier falling to $105.70. Prices remained under pressure, however, from news of increased supply from the Libya and the North Sea.
Libyan Oil Minister Abdelbari Al Arusi told a news conference that the country’s oil output had improved to around 700,000 barrels per day (bpd) and the government was working to end protests at oil facilities. Arusi said last week that strikes and protests at oil terminals had cut output to 330,000 barrels per day (b/d) from 1.4m before output was disrupted.
Reuters
