LONDON: Brent crude oil fell towards $108 a barrel yesterday on prospects for ports in eastern Libya to resume exports and a possible scaling back of the US Federal Reserve’s massive stimulus programme.
Libya’s government expects eastern tribes to reopen three oil ports this weekend, which could increase output at the Opec producer from the current 250,000 barrels per day (bpd).
But there are doubts as to whether Libya can raise its output to pre-protest levels of more than one million bpd as internal conflicts continue to threaten its oil industry. “I don’t think anything is set in stone yet in terms of a definite restart, but market expectations are that the Libyan ports are going to restart,” said Amrita Sen, chief analyst at consultants Energy Aspects.
January Brent was down 30 cents at $108.37 a barrel by 1233 GMT, following a fall of more than $1 on Thursday. US crude futures for January were down 50 cents at $97, after rising around $6 in the past two weeks.
Upbeat economic data from the United States on Thursday heightened speculation that the Fed may start trimming its monthly bond purchases as soon as next week. The move could strengthen the dollar and weigh on demand for dollar-denominated commodities such as oil. But stronger US economic growth could also lead to higher fuel demand in the world’s largest oil consumer.
Brent was supported by supply concerns arising from bombings near the Suez Canal, a major transportation channel for global oil markets. US oil also was supported by expectations that new pipelines starting in the coming weeks and next year could help reduce US stockpiles.
Brent has slipped by more than two percent so far this week, the steepest weekly loss in seven weeks, and its premium to US crude futures closed at $11.17 on Thursday.
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