Commodities

Brent climbs towards $84 on Ukraine tensions, Libya disruptions

Reuters Singapore | Updated on November 25, 2017

Brent crude rose towards $84 a barrel on Monday, climbing for a second straight session amid heightened military activity in Ukraine and as chaos in Libya again threatened disruptions to the country’s oil output and exports.

A slew of weak economic data from China offered further evidence that the world’s second largest economy was cooling, opening the door for Beijing to implement stimulus measures that could spark demand in what is also the world’s No.2 oil consumer.

The dollar nudged lower but remained close to a four-year peak on Monday, helping to cap oil markets. A strong greenback makes dollar-denominated commodities more expensive for holders of other currencies and slows buying.

“I think generally the market was reacting to reports that Russian troops were going into Ukraine,’’ said Victor Shum, managing director of downstream energy consulting with IHS.

The market was also eyeing the ongoing political turmoil in Libya, where the El Feel and El Sharara oilfields have been shut and exports from Libya’s 120,000 barrel per day Hariga oil port were blocked on Saturday.

Brent, US crude

Brent crude for December delivery rose 46 cents to $83.85 per barrel by 0602 GMT after gaining 53 cents in the previous session. The benchmark declined nearly 3 per cent last week, the seventh straight week it had fallen, the longest such stretch since late 2002.

US crude climbed 32 cents to $78.97 per barrel after settling 74 cents higher in the previous session.

“Oil has turned slightly positive, but I don’t think it changes the overall market scenario,’’ said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“I am expecting the dollar’s strength to resume in the days ahead,’’ McCarthy said.

Ukraine-Russia ceasefire

The two-month-old ceasefire between Ukraine and pro-Russian separatists looked shakier over the week-end as the pro-Moscow stronghold of Donetsk was hit by the heaviest shelling in a month on Sunday.

A European security watchdog also said that it had spotted unidentified armoured troop columns in rebel territory, which Kiev said supported its claims that Russia was moving tanks and men into Ukraine.

China’s consumer inflation

China’s annual consumer inflation remained at a near five-year low in October amid sluggish demand, the National Bureau of Statistics said on Monday.

That followed weaker annual growth in China’s exports and imports in October, data showed on Saturday, although China’s crude imports compared with a year ago accelerated with the drop-off in prices.

“China's oil purchases could support market sentiment near-term, but focus should remain mainly on whether or not OPEC will cut output,’’ ANZ analysts said in a research note on Monday.

OPEC ministers will meet on November 27 and are likely to discuss how to react to the nearly five-month-long slide in oil markets that started in mid-June.

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Published on November 10, 2014
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