Oil prices down on fading supply fears

Posted By: Staff
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Oil prices edged lower in Asia today on fading fears that conflicts in crude producers Libya and Iraq could result in a major supply disruption, analysts said. US benchmark West Texas Intermediate for October delivery was down six cents at USD 93.39 while Brent for October eased 24 cents to USD 102.04 in late-morning trade. "Benchmark prices weakened further as there has been no disruptions in crude supply despite ongoing crises in Iraq and Libya," said Sanjeev Gupta, head of the oil and gas practice at consultancy EY.

In Iraq, the OPEC cartel's number-two producer, US air strikes that began on August 8 have pinned back the Islamic State group who have overrun large swathes of the country's north and west as well as parts of Syria. The jihadist expansion has not affected oil production in Iraq's south, where most of its oil infrastructure is situated. Supply to neighbouring Turkey and Jordan have however been disrupted. In Libya, output has been increasing in the vital oil sector despite ongoing fighting between Islamist militia and government forces.

Mohamed Hrari, spokesman for Libya's National Oil Corporation, said production on Monday reached 550,000 barrels a day, from around 400,000 barrels previously. Gupta said investors will next focus on a three-day meeting of US and European central bank heads in Jackson Hole, Wyoming that begins today. "

The market is looking for clues from the outcome of the two-day meeting of the world's top central bankers, who will air their views on central bank policies and labor market situation this weekend in the US," Gupta said.


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