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Brent crude oil retreated below $104 on Thursday as both supply and demand factors weighed on crude prices in an oversupplied market. 

The commodity traded at $103.80 at 6:20 GMT as investors waited for more economic data, due out later in the day.

After Chinese implied oil demand figures came in below expectations on Wednesday, investors began to worry about global demand. Adding to those fears was U.S. inventory data, which showed that analysts’ forecast of a two million barrel drop was far too optimistic.

Instead, the Energy Information Administration confirmed that U.S. crude inventories increased by 1.4 barrels last week, suggesting that the number one oil consuming nation’s appetite could be dying down.

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Brent fell under more pressure as global supplies continued to increase after Libya sent out its first oil tanker, filled with 670,000 barrels of crude, from its newly reopened Ras Lanuf port.

Though the nation is still dealing with ongoing conflict in its capital, the port’s reopening proves that the Libyan government has regained control of most of the nation’s oilfields and is working to get them up and running again.

Tension in Iraq is still in the back of investors’ minds as Islamic State militants continue to clash with Iraqi forces in the northern part of the nation. For the moment, Iraqi supplies remain mostly unaffected, as they are confined to the southern part of the country.

However, Reuters reported that the EU is currently mulling over the possibility of sanctions on Syrian oil in an effort to cut off funding to the Islamic State rebels who have taken over several oilfields in Syria. 

EU foreign ministers are set to meet on Friday to discuss how to create sanctions that would have the most impact on the rebel fighters.

Posted-In: News Commodities Forex Global Pre-Market Outlook Markets Best of Benzinga

 

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