Oil prices mixed after volatile week

20th September 2013, Comments 0 comments

Global oil prices traded mixed Friday following a volatile few days triggered by surprise action by the Federal Reserve and easing Middle East supply concerns.

Brent North Sea crude for delivery in November rose 46 cents to stand at $109.22 a barrel in London midday deals.

New York's main contract, West Texas Intermediate (WTI) for October, fell 40 cents to $105.99 a barrel.

"The main focus has returned to the oil (supply and demand) fundamentals, especially due to the increasing oil production in Libya," said Myrto Sokou, senior research analyst at Sucden brokerage.

Analysts said the return to production of Libyan oil fields and the easing of tensions in the Middle East after Syria agreed to a plan to put its chemical weapons arsenal under international control helped ease prices.

Protests by oil field and export terminal workers since July had crippled Libyan production.

Crude futures were weighed down also by Iran's new President Hassan Rowhani, who said the Islamic republic did not seek war with any country, although he insisted that Israel is an "occupier" that has brought instability to the Middle East.

Oil prices lost more than $1.50 Thursday following the comments out of major oil producer Iran and amid the events in fellow OPEC-member Libya.

They had however risen strongly on Wednesday and for part of Thursday after the Federal Reserve confounded market expectations with its decision to refrain from tapering its $85-billion-a-month bond-buying stimulus programme.

Both oil contracts had surged by more than two and a half dollars on Wednesday following the Fed decision the same day.

Markets had expected the US central bank's policy setting Federal Open Market Committee (FOMC) to scale down its bond-buying spree, known as quantitative easing (QE).

But the FOMC said that although the economy appears to be holding up amid government spending cuts, it "decided to await more evidence that progress will be sustained" before deciding to scale down the stimulus package.

The news has buoyed oil demand hopes in the United States, which is the world's top crude consuming nation.

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© 2013 AFP

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