LONDON: Brent crude oil dropped below $108 per barrel yesterday after a sharp rally in the previous session as investors awaited US data this week for hints on when the Federal Reserve will scale back its stimulus.
Losses were checked, however, by supply outages in major producers Libya and Iraq.
Brent slipped 39 cents to $107.83 a barrel by 1338 GMT after sinking as low as $107.43 earlier. US crude was off 54 cents at $105.43. On Friday both crude oil benchmarks had logged their biggest daily percentage gains in a week following unexpected strength in trade data from China.
“We remain sceptical as to whether the upswing can continue,” said a Commerzbank research note. “The oil market also remains amply supplied in the medium term.”
In the near term, market players were taking stock of protests in Libya that have cut exports to less than half of normal rates of one million barrels per day (bpd) for two weeks running and by port work next month in Iraq that is expected to cut shipments there by 500,000 bpd.
“We remain constructive on prices this summer as seasonally stronger crude demand and supply disruptions point to tighter balances (in the third quarter),” Morgan Stanley analysts said in a note.
Reuters
