Oil prices steady, Brent stays above $115

25th March 2011, Comments 0 comments

Oil prices steadied on Friday at the end of a week in which market movement has been dominated by unrest in Libya and the Middle East.

Traders also digested US growth data, which is significant for energy markets as the United States is the world's biggest oil-consuming nation.

Brent North Sea crude for delivery in May was down 14 cents to $115.58 a barrel in afternoon London deals.

New York's main contract, light sweet crude for May, gained five cents to $105.65.

"The risk premium from the ongoing Libya's fallout and jitters over Yemen is already priced in," said VTB Capital analyst Andrey Kryuchenkov, explaining the reason behind steady prices.

Oil traders have been making deals in recent days against a backdrop of anti-government protests that have spread across the Middle East and North Africa, with uprisings in Yemen, Syria and Bahrain after similar movements led to the recent ouster of leaders in Egypt and Tunisia.

And in Libya, NATO late Thursday agreed to enforce a no-fly zone to stop Moamer Kadhafi's jets from attacking rebels while US, British and French planes continued to target his government's infrastructure.

Oil-rich Libya was producing 1.69 million barrels a day before the unrest, according to the International Energy Agency, but has since ground almost to a halt.

"The main focus (for traders) remains on the ongoing political unrest in Libya, Yemen and Syria," said Myrto Sokou, an analyst at Sucden brokers.

"It was certainly a very volatile and unpredictable week with fairly nervous trading conditions across the commodities and equity markets."

Elsewhere Friday, official data revealed that US economic growth was much faster than first thought in the final months of 2010, as the Commerce Department revised the figure upward to 3.1 percent on Friday.

In its final estimate for the fourth quarter of 2010, US economic growth was stronger than the 2.8 percent the department had previously reported.

Ahead of the data, the US government announced on Wednesday that US gasoline (petrol) stockpiles dived by 5.3 million barrels last week.

The market is closely following the level of gasoline reserves ahead of the summer driving season in the United States starting in May, when many Americans hit the roads on holiday, pushing up fuel demand.

© 2011 AFP

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