Brent Steady As Geopolitical Worry Weighs In
Brent crude oil maintained its position above $105 on Tuesday as geopolitical tension once again took the driver’s seat.
The commodity traded at $105.40 at 8:25 GMT as investors temporarily overlooked the global supply glut to focus on the growing conflict in the Middle East and North Africa.
Despite reports from Libya’s National Oil Corp saying that the nation’s oilfields were secure, markets are keeping a close eye on the developing conflict as foreigners evacuate the company and fighting continues over the nation’s airport.
Libyan oil production was down to 450,000 barrels per day from 500,000 last week, adding to worries that the nation’s conflict would continue to stifle oil exports.
In Iraq, Islamist militants continued to expand their stronghold in the northern part of the country, further threatening to push the nation into a civil war. However, the nation’s oil exports have remained intact with the majority of production situated in the south.
On Monday, the Iraqi oil ministry announced that the nation’s oil output averaged 2.442 million barrels per day in July, an increase from June’s figure.
Moving forward, investors will be watching for economic data from around the globe for a better idea of the world’s demand, as well as inventory data from the U.S. that will paint a clearer picture of the number one oil-consuming nation’s appetite.
A Reuters survey showed that analysts believe that U.S. crude inventories lost one million barrels last week, and that gasoline stocks remained unchanged.
Meanwhile, data from China showed the nation’s service sector slowed in July, reminding markets that the nation’s economy is still struggling to regain momentum.
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