Brent steady under $109, set for 2nd weekly loss
Singapore, June 6, 2014
Brent nudged higher to hover just under $109 a barrel on Friday, but was set to post a second straight weekly fall on easing Ukraine tensions and ample supply.
Optimism that monetary stimulus in the euro zone will lift economic growth and fuel demand helped limit the recent losses.
Investors are eyeing key jobs data from the United States to reinforce hopes that the world's largest economy and oil consumer is on a recovery path.
Brent crude edged up seven cents to $108.86 a barrel by 0645 GMT. US crude for July delivery was at $102.53 a barrel, up five cents.
"The tension in Russia and Ukraine has eased somewhat post the Ukrainian elections," said Mark Keenan, head of commodities research Asia at Societe Generale. Market fatigue from the three-month long conflict has also eroded some of the risk premium associated with the issue, he added.
France hopes that a gathering of world leaders in Normandy on Friday to mark the 70th anniversary of the Allied D-Day landings will bring a thaw in the Ukraine crisis.
French diplomats say President Francois Hollande hopes to get Russian President Vladimir Putin to at least shake the hand of Ukrainian president-elect Petro Poroshenko on the sidelines of the ceremonies, in what could represent a first step in defusing tensions.
On Thursday, the European Central Bank launched a series of measures to pump money into the sluggish euro zone economy.
News of the European stimulus measures and elevated overall crude inventories in the United States have widened Brent's premium to West Texas Intermediate to settle at above $6 a barrel on Thursday after hitting nearly a month's low earlier in the session.
Total crude inventories remain high in the United States although new pipeline capacities have drained stocks at WTI's delivery point in Cushing, Oklahoma, to the lowest since 2008.
WTI could come under further pressure as high refinery utilisation rates meant that there is little room to increase crude throughput, Keenan said, adding that this could widen its spread with Brent to about $10 a barrel.
"It's likely that crude stocks are going to remain elevated for the foreseeable future and in turn they will tend to back out light sweet imports from the U.S. in the future," Keenan said. - Reuters