Oil prices trade mixed ahead of US inventories data

9th July 2014, Comments 0 comments

Global oil prices diverged on Wednesday as dealers await US stockpiles report for the latest reading on energy demand in the world's top crude consuming nation.

Brent North Sea for delivery in August fell 11 cents to stand at $108.83 a barrel in London late morning trade.

US benchmark West Texas Intermediate for August rose 15 cents to $103.47 a barrel compared with Tuesday's close.

The US government's Department of Energy (DoE) will later publish its crude reserves data for the week ending July 4.

"The official US stockpile numbers out later Wednesday will be scrutinised by investors who want a sense of US demand as the driving season heats up," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.

Investors typically expect a spike in US gasoline demand during the summer months when Americans traditionally take to the roads for their holidays.

Crude reserves are expected to have fallen two million barrels last week, according to analysts polled by the Wall Street Journal.

Gasoline stockpiles also likely fell 300,000 barrels, while stocks of distillates, which include heating oil and diesel, are expected to have climbed 1.3 million barrels.

McCarthy said oil prices remain under pressure due to "eroding risk premiums attached to tense situations in the Middle East".

Brent crude has fallen more than $3.0 since July 3 after Libya's interim Prime Minister Abdullah Al-Thani declared that authorities have regained control of two export terminals blockaded by rebels.

The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts say.

In Iraq, a jihadist insurgency that has overrun large swathes of Iraq north and west has yet to impact on the country's key oil assets in the south.

Iraq is the second biggest producer in the 12-nation OPEC oil cartel, pumping 3.4 million barrels a day and possessing more than 11 percent of the world's proven reserves.

Crude futures had fallen on Tuesday as concerns eased about supply disruptions from the Middle East, with Libya exports set to resume and Iraq unrest not yet affecting exports.

"Supply concerns have eased in recent sessions as the risk of disruptions to Iraqi output has largely abated as newswires report no further advancement of militant forces towards the southern oilfields," said Sucden brokers analyst Kash Kamal.

"The anticipation of increasing Libyan output further alleviated supply pressures."

© 2014 AFP

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