Energy Commodities Price Watch: Brent Slips as Supply Worries Ease

on Aug 7, 2013
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iNVEZZ.com, Wednesday, August 7th: The Brent price declined on Wednesday with concerns about supply disruptions in the Middle East easing. West Texas Intermediate (WTI) fluctuated ahead of a weekly government report on US crude inventories. The natural gas price was under pressure with forecasts of hot weather in Texas failing to offset expectations of below-average temperatures in the US Northeast and Midwest.

**WTI Price Swinging between Gains and Losses**
WTI futures for delivery in September fell 14 cents to trade at $105.16 a barrel on the NYMEX as of 13:18 BST. The oil price advanced earlier in the day following a report which showed that German industrial production had risen in June, adding to signs that growth in the Eurozone’s largest economy had accelerated in the second quarter.

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The American Petroleum Institute yesterday reported that US crude inventories fell by 3.66 million barrels. Investors are now waiting for the weekly report by the US Energy Information Administration (EIA), which is also expected to point to a decline in stockpiles.

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Energy Commodities Price Watch: Brent Crude Slips Below $100

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“Stockpile withdrawals are normal for this time of year,” said Hans van Cleef, an energy economist at ABN Amro Bank, as quoted by Bloomberg. “Draws in the past few weeks have supported prices somewhat, but from a historical point of view we’re at relatively high levels, meaning there shouldn’t be any panic.”

Bloomberg also quoted David Lennox, a resource analyst at Fat Prophets, as explaining that investors had been reacting to “the EIA numbers for the last three or four weeks because of this substantial draw down that we’ve seen”.
“We will be looking forward to less of a draw down and a hint of a more negative impact on crude prices,” Lennox said.

**Brent Price Falls below $108**
Brent futures for September delivery shed 67 cents to trade at $107.51 a barrel on the ICE Futures Europe exchange. The benchmark oil price dropped amid progress in resolving supply disruptions in Libya and after Iran’s President Hassan Rouhani signalled readiness to negotiate with the West over the nation’s nuclear programme.
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“Supply risks have clearly shifted to the background at the moment,” said Commerzbank analyst Carsten Fritsch, as quoted by Reuters. “Even the sharp drop in US crude stocks failed to support the price.”
The Brent price was also under pressure with maintenance on the Forties pipeline in the North Sea finishing on schedule. Forties is one of the four most important North Sea crude grades making up the Dated Brent benchmark, the other three being Brent, Oseberg and Ekofisk.
**Natural Gas Price Update**
Natural gas futures for September delivery slid 1.69 percent to trade at $3.26 per million British thermal units as of 14:15 BST. Yesterday, futures closed at $3.318 per million British thermal units, the contract’s lowest settlement price since February.
Bloomberg quoted Commodity Weather Group LLC as forecasting cooler-than-normal weather in the US Northeast and Midwest through August 20, while most of Texas is expected to be warmer.
“Texas is the only show in town for exceptional heat,” noted Matt Rogers, Commodity Weather Group’s president. Temperatures in the Northeast and Midwest may be three to five degrees below normal from August 11 to August 20, he added.
Mild weather in densely populated US areas during the summer curbs natural gas demand from power plants as fewer people use air conditioners.

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Energy Commodities Price Watch: Brent Crude Slips Below $100
Energy Commodities Price Watch: WTI Slides on Speculation of Rise in US Fuel Inventories

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http://nvz.bz/13CTjSM

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