Brent Poised For Largest Weekly Loss In Four Months
Brent crude oil made its way above $106 on Friday but looked poised to post its largest weekly decline in three months as it traded at $106.25 at 6:00 GMT. The commodity was under pressure from the prospect of Libyan oil returning to the market within the next few days.
Libya's eastern oil ports could be reopened soon after being shut down for eight months. The ports were seized by rebel groups who were demanding more political rights and a cut of the nation's oil revenue. Now, the government is negotiating with the protesters and says the two sides are close to reaching a deal which will reopen the oilfields.
If followed through, Libya's exports could increase to almost 600,000 barrels per day from its current 150,000 bpd. Although the nation would still be operating below its 1.4 million bpd capacity, the increase would have a significant impact on markets.
Analysts are cautious though, as this is not the first time the government has said an agreement was on the horizon. There is still the possibility of a breakdown between rebels and the Libyan government.
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Ongoing tension between Russia and the West underpinned prices as the two sides remained at odds in what has been the most serious standoff since the Cold War. CNBC reported that on Thursday, Russia increased gas prices for Ukraine to nearly double its original price.
Brent is also being affected by investors' caution ahead of the US nonfarm payrolls data, due out later on Friday. Most are expecting to see a 200,000 increase in hiring for March, which would mark the figure's largest rise since December. A better than expected figure would help boost crude prices as it indicates that the number one oil consuming nation's economy is growing.
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