Brent Slides On Taper Talk
Brent crude oil looked poised to end the week on a low note on Friday morning as it traded at $108.52 at 5:15 GMT.
The commodity was weighed down by rising speculation that the US Federal Reserve was prepared to taper its stimulus spending at its meeting next week as well as the possibility that Libya may reopen some of its export terminals.
Markets are anxiously awaiting next week's Federal Reserve policy meeting as most expect it will center around the bank's taper timeline. Better than expected labor data out last week strengthened the bank's case to start tapering at its December meeting, however many still see the bank waiting for further signs of sustainable recovery.
News that the US government was working towards a bipartisan budget deal also supported a sooner than expected taper. If the budget deal passes through the House of Representatives, much of the Fed's concern about fiscal instability would be alleviated, leaving the door open for a cut back.
Brent prices also took a hit as markets began to anticipate an increase in Libya's oil exports. CNBC reported that Libyan Prime Minister Ali Zeidan said three of the nation's eastern oil ports could reopen over the weekend. The ports set to open include two of the country's largest, both of which have been shut since July.
Labor strikes have more than halved Libya's oil exports and supported Brent prices. Although this is not the first time the Libyan government promised to that ports would reopen, it is the first time the opposition has echoed the same sentiment.
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