Arabic

Sign up for Iraq Directory

New to Iraq Directory?
Sign up here.

Acquire your prominent and highly accessible bi-lingual (English and Arabic) online presence by registering with us & listing your company in IraqDirecotry.com
Register

Crude Higher on Iraq Risk But Supply Still Plentiful

  • Traders worried about Libyan supply disruptions amid labor unrest
  • Market participants watching for results of Fed policy meeting
  • NEW YORK--A rally in Brent crude futures lifted U.S. oil prices to their highest level in a week Monday, after reports of plunging Libyan production sparked concerns about supply disruptions.

Light, sweet crude for December delivery rose 83 cents, or 0.9%, to $98.68 a barrel on the New York Mercantile Exchange. The U.S. contract known as West Texas Intermediate, or WTI, settled at its highest level since Oct. 21. The upward move comes after U.S. futures lost more than 3% last week.

Brent crude on the ICE futures exchange climbed $2.68, or 2.5%, to $109.61 a barrel, posting its highest settlement value in nearly three weeks.

The gains were fueled by a Bloomberg News report that crude output in Libya fell to 250,000 barrels a day, out of the 1.4 million barrel-a-day production the country reported this spring amid labor unrest.

Strikes at Libya's oil-export terminals have severely depressed the country's crude output in recent months and provided a lift to Brent, the European benchmark that many analysts and traders consider to be a gauge of world oil prices.

"If you take away Brent's more than $2.50 [per barrel] rally, you could imagine WTI being a $1 lower today," said Tim Evans, an energy analyst with Citi Futures in New York.

He added that the loss of the Libyan oil is a "very direct problem for European refineries, who now have to source their oil elsewhere."

The Libya news, in part, helped push front-month November reformulated gasoline blendstock, or RBOB, up sharply, or 1.7%, to $2.6309 a gallon. November heating oil also added 5.47 cents, or 1.9%, to $2.9644 a gallon.

U.S. refiners are increasingly supplying diesel fuel to rebounding European economies where it's the main fuel used by cars and trucks. Last week, domestic fuel exports rose by more than 20% from a year earlier, due mainly to a surge in shipments of distillate fuels, according to the Energy Information Administration.

Also helping refined products Monday was a Reuters report that a fire-damaged crude distillation unit at a 174,500- barrel-a-day Citgo Petroleum Corp. refinery in Lemont, Ill., would take five to six months to repair. The unit, damaged by a fire last Wednesday, is the area of the plant where energy companies begin to process crude into refined products.

A Citgo spokesman didn't immediately respond to a request for comment.

Market participants are worried the shutdown could add to a glut of U.S. oil supplies, which have risen by 24.2 million barrels, or 6.8%, over the past five weeks, while at the same time, domestic production has climbed to record highs.

On the economic front, traders also began to shift some of their attention to this week's two-day Federal Reserve policy meeting, where the central bank is expected to discuss its economic-stimulus program, which has helped support crude prices.

Many investors expect the Fed to maintain the $85 billion-a-month bond-buying program after the meeting on Tuesday and Wednesday. The measure has helped oil prices by weakening the dollar, making crude cheaper to buy with other currencies.

Updated 30 Oct 2013 | Soruce: Nasdaq |
Baghdad1.jpgBaghdad2.jpgBaghdad3.jpgBaghdad4.jpgBaghdad5.jpgBaghdad6.jpg1o5B3w_AuSt_91.jpgRTR45I2V.jpg
Child Aid International