Brent crude headed for its biggest weekly decline in six months as Libya prepared to resume exports from two terminals and Iraq’s crude production remained unaffected by violence. West Texas Intermediate fell for a seventh day, the longest retreat since 2009.
Brent and WTI futures both slipped by 0.3 percent today. Libya will start shipping crude from Es Sider and Ras Lanuf at full capacity after taking back control of the ports from rebels, according to National Oil Corp. Fighting in Iraq hasn’t spread to the south, home to more than three-quarters of its output. Hurricane Arthur, the first to make landfall on the U.S. since 2012, weakened as it pulled away from North Carolina.
“The thing which pushed oil really down was Libya saying it will reopen the two terminals,” Hans van Cleef, an energy economist at ABN Amro Bank NV, said by phone from Amsterdam. “We’ll have to wait and see what actually happens, but for the moment it gives some relief. In Iraq we expect exports and production will probably remain untouched.”
Brent for August settlement fell 38 cents to $110.62 a barrel on the London-based ICE Futures Europe exchange at 4:32 p.m. local time. The grade has lost 2.4 percent this week, its worst performance since Jan. 3. The European benchmark crude traded at a premium of $6.87 to WTI on ICE, compared with $7.56 on June 27.
WTI for August delivery was at $103.76 a barrel in electronic trading on the New York Mercantile Exchange, down 30 cents. The contract slid 42 cents to $104.06 yesterday. The volume of all futures traded was about 89 percent below the 100-day average for the time of day. Prices have declined 1.9 percent this week. Floor trading on the Nymex is closed today for the Fourth of July holiday.
The U.S. overtook Saudi Arabia and Russia to become the world’s biggest producer of oil, Bank of America Corp. said. U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report today.
Libya will resume shipments “as soon as possible” at the two ports, and talks on crude sales will start with international companies, Mohamed Elharari, a spokesman for state-run National Oil Corp., said yesterday. The country has become the smallest producer in the Organization of Petroleum Exporting Countries in the past year because of unrest.
In Iraq, fighting has been concentrated in the north, where insurgents from a breakaway al-Qaeda group, now known as the Islamic State, captured the city of Mosul in June. The nation, the second-largest OPEC member, will ship 2.8 million barrels a day this month, close to a record high, loading programs obtained by Bloomberg show. It exported 2.423 million barrels a day last month, Asim Jihad, a spokesman for the Oil Ministry, said today.
“The dying-down of geopolitical tensions is clearly depressing oil prices,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “The market is removing some of the risk premium. West Texas has now fallen below the key support level of $105.25 a barrel, meaning that risks are now on the downside.”
WTI may extend its slide next week amid speculation that production from Iraq’s south will continue, according to a Bloomberg News survey. Fourteen of 31 analysts and traders, or 45 percent, forecast futures will drop while six respondents predicted a price gain.
Hurricane Arthur, the first major storm in the Atlantic this year,left thousands without power in North Carolina as it moved up the U.S. East Coast, where the weakened storm will scrape past Massachusetts before hitting the Canadian Maritimes tomorrow. The storm was 330 miles (530 kilometers) southwest of Chatham, Massachusetts, at 11 a.m. local time with Category 1-strength winds of 90 miles per hour, down from a peak of 100.