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LONDON: Oil dropped to $112 a barrel yesterday, pressured by signs of a healthier supply outlook and a rise in US jobless claims, offsetting Chinese data signalling stabilisation in the economy of the world’s second-largest oil consumer.
US crude inventories rose more than expected last week, a report showed on Wednesday. This weekend Britain’s largest oilfield, Buzzard, is scheduled to restart, increasing supply of crude underpinning the Brent contract. Brent crude for December delivery was down $1.22 at $112 a barrel by 1352 GMT, after settling 78 cents lower. US oil for November fell $1.08 to $91.04.
“Brent is currently under pressure,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. “The fact that North Sea supply is due to rebound with the restart of the Buzzard field may also be a factor for the weaker tone of the Brent price.”
In a further addition to supplies, Sudan issued a tender to sell Dar Blend crude in November after parliaments in Khartoum and South Sudan ratified an agreement this week to end hostilities and restart southern oil exports.
The market made a further downward lurch after the US jobs report. Initial claims for state unemployment benefits rose 46,000 to a seasonally adjusted 388,000, the Labour Department said yesterday.
Meanwhile, Goldman Sachs, in a note to clients, cut its Brent price forecast for 2013 to $110 a barrel from $130, citing an increasing outlook for supply outside of the Opec. The bank, which up until now had the highest oil price prediction among major forecasters, said it still expected the physical market to remain tight and maintained a near-term target of $120.
Brent has gained more than 4 percent this year, partly due to supply-side concerns. North Sea output has underperformed as fields including Nexen’s Buzzard shut for maintenance, supporting Brent. Buzzard, which has missed previous timetables to restart, is currently due to resume output by Sunday. Reuters