Oil price extends last week’s loss on supply concerns
Crude oil futures have been trading near Friday’s closing levels so far in today’s session, following their first weekly decline in a month. Oil prices have faced downward pressure over US supply concerns, as well as news of renewed production from Libya.
Brent for April delivery had shed eight cents, or 0.13 percent, to $60.14 a barrel as of 07:38 GMT on the London-based ICE Futures Europe exchange. Last week the contract slid 2.1 percent, snapping a three-week winning streak.
Futures swung between gains and losses today amid news from Libya, OPEC’s smallest producer. According to a release from the state-run National Oil Corp, cited across the media, the country’s largest oil field at Sarir resumed operations yesterday after a pipeline was blown up last week by unknown militants. The key oil export terminal at Zueitina in the eastern part of the country also resumed operations.
April WTI futures, had declined 0.26 percent, or 13 cents, to $50.68 per barrel in electronic trading on the NYMEX in New York as of 07:38 GMT. US crude prices contracted 4.6 percent last week after a release from the US Energy Information Administration (EIA) showed that US inventories rose 7.7 million barrels to 425.6 million. The Wall Street Journal cited a report from Adam Longson, head of energy research at Morgan Stanley, as saying: “US crude stocks are elevated and set to build through May as challenges continue to mount”.
According to data from Baker Hughes released on Friday, the number of US drilling rigs declined but analysts have pointed out that the rate of decline has slowed considerably. The survey showed that the rig count shrank by 37 to 1,019 last week. That’s the fewest in service since July 2011. Since 05 December drillers have idled 556 machines, a reduction of 35 percent.
Based on the two front month contracts, Brent was trading at a premium of $9.46 to WTI as of 07:38 GMT. The spread between the two benchmarks has expanded by $6.61 since the start of the month.