Crude-oil futures swung between gains and losses in Asian trading hours Monday after declining for three consecutive weeks, while analysts warned that geopolitical risks to oil supply shouldn’t be completely overlooked.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August CLQ4 -0.32% traded at $100.50 a barrel, down $0.33 in the Globex electronic session. August Brent crude UK:LCOQ4 +0.32% on London’s ICE Futures exchange fell $0.08, to $106.58 a barrel.
“There are bearish risks from Libya and potentially Iran, but with Iraq on edge and Russia/Ukraine still simmering, oil prices are expected to find support,” Edward Morse, head of commodities at Citi Research, said.
Over the weekend, Iraq’s parliament failed to agree on a new speaker, prolonging a political impasse and delaying measures to address the country’s deteriorating security situation.
In Vienna, U.S. Secretary of State John Kerry warned of “very significant gaps” in nuclear talks with Iran, as negotiators struggle to meet a July 20 deadline to complete a final nuclear deal.
And amid hopes that Libya’s oil production may be on the rise, the Brega oil port in the country’s east has been shut by protesters, an oil official said Saturday.
“Oil prices have returned to early June levels, but the market remains on a knife edge,” Barclays analyst Miswin Mahesh said in a report.
“Geopolitical tension across Bahrain, Saudi Arabia, Israel and Kuwait also raises the market risk premium that could widen the Brent-WTI spread,” he said. The Brent-WTI spread is currently at $6.11 a barrel.
Nymex reformulated gasoline blendstock RBQ4 +0.43% for August — the benchmark gasoline contract — fell 29 points to $2.9056 a gallon, while August heating oilHOQ4 -0.35% traded at $2.8650, 41 points higher.
ICE gasoil for August changed hands at $883.2.
Source: MW, 2014