Oil prices down on easing Middle East supply concerns

Tuesday 08 July 2014 13.08
Oil prices continue to see losses amid receding Iraq concerns
Oil prices continue to see losses amid receding Iraq concerns

Oil prices extended their losing run today as dealers awaited the resumption of Libyan crude exports and amid receding worries about fighting in major producer Iraq.

Brent North Sea for delivery in August dropped 74 cents to stand at $109.50 a barrel. US benchmark West Texas Intermediate for August fell 15 cents to $103.38 a barrel compared with Monday's close. 

"The imminent return of Libyan supply to the market is continuing to weigh on prices," Commerzbank bank research said. 

"Brent has fallen for the ninth out of the last ten days of trading and dropped overnight to below the $110 per barrel mark for the first time in nearly four weeks. WTI has fallen for seven straight days of trading, suffering its longest losing streak since December 2009," the bank added. 

Oil prices have tracked lower since last week when Libya's interim Prime Minister Abdullah al-Thani said authorities had regained control of two export terminals blockaded by rebels. 

The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts have said. The sites are also thought to have up to 10 million barrels of oil in storage that could be released. 

Easing concerns over a possible supply disruption in crisis-hit Iraq are also dampening prices. Islamist insurgents have overrun swathes of Iraq and are close to Baghdad following a lightning offensive since June 9, displacing hundreds of thousands of people and initially alarming global oil markets. 

After nearly four weeks of fighting with government forces, however, the group has yet to directly threaten the key oil-producing region in the country's south. 

Iraq is the second biggest producer in the 12-nation OPEC oil cartel, pumping 3.4 million barrels a day and possessing more than 11% of the world's proven reserves.