Brent Slips In Supply Glut
Brent crude oil continued to founder after prices fell 5.6 percent in July, the biggest monthly loss since April 2013.
The commodity traded at $106.04 at 6:50 GMT as views that the market is over-supplied outweighed geopolitical tension around the world.
Most analysts don’t see global demand living up to the current supply, which has weighed on the crude prices. The Wall Street Journal reported that although the current geopolitical conflicts around the world are not enough to provide a sizable lift for crude prices, analysts see Brent holding above $105 in the third quarter as supply interruptions from Libya continue.
Related Link: Brent On Track For Largest Monthly Loss In Over A Year
Libyan exports have ramped up in recent months as the country attempts to overcome recent protests that shut down the majority of its major oil ports for most of 2014. However, although the government has made agreements with the rebels holding most of the oil fields, reopening them has been a slow process.
Meanwhile Iraqi oil has been largely unaffected by the continued fighting in the OPEC nations. While extremist groups have overtaken several northern cities, most of the nation’s oil production comes from oil fields in the south.
Brent prices have also been under pressure from a stronger dollar as U.S. economic indicators show that the nation’s economy is back on track. The greenback could rise even further on Friday if U.S. non-farm payrolls data comes in as strong as expected. A rising dollar would be negative for Brent as the commodity is priced in dollars.
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