Brent heads to close 2013 flat
January 01, 2014 - 12:37:02 pm
NEW YORK: Brent crude fell yesterday, heading to close 2013 nearly unchanged following a year in which traders balanced a spate of supply disruptions from Middle East and Africa against surging output from the United States.
Weighed down by expectations oil shipments from some shuttered Libyan ports would resume soon, Brent was trading just 40 cents below end-2012 levels of $111.11 a barrel. The international benchmark traded in a $22 range from $96.75 to $119.17 this year, the narrowest band since 2006.
US crude was set to end the year up nearly seven percent as traders head into 2014 eyeing improving demand, the end of the Federal Reserve’s monetary stimulus and the dramatic overhaul of the world’s largest oil market caused by the shale revolution.
Brent’s premium to US crude traded at just over $12 a barrel yesterday, down from more than $19 a barrel at the end of last year.
Brent crude traded down 70 cents to $110.61 a barrel at 11:41am EST (1641 GMT). US oil fell 79 cents to $98.50 a barrel, after closing 2012 at $91.82 a barrel. “There’s been some optimism about the potential return of supplies from South Sudan and Libya, and that’s probably what’s helped Brent down,” said Amrita Sen, chief analyst at consultants Energy Aspects.
Violence in South Sudan has reduced crude output by about a fifth to 200,000 barrels per day (bpd), but the South Sudanese government and rebels loyal to former Vice-President Riek Machar agreed on a ceasefire on Tuesday as they prepare for talks to end the bloodshed.
In Libya, where protests have slashed output to less than 250,000bpd from 1.4 million bpd in July, the Sarir and Messla oilfields are up and running. But the Hariga oil port they connect with, which officials had said was to open soon, needs to reopen before exports can resume.
In addition to the Libyan disruptions, unrest in Iraq and tensions between Iran and the West over Tehran’s disputed nuclear program supported crude prices throughout 2013.
These factors have offset concerns over a weak demand outlook in industrialised nations and a slowdown in consumption in China, the world’s second-biggest oil consumer.