Brent hits 3-week high on Africa supply cut
Singapore, December 26, 2013
Brent crude rose above $112 a barrel on Thursday, touching a three-week high, as civil unrest in Africa reduced supply.
The closure of key ports in eastern Libya has slashed output from the OPEC producer to 110,000 barrels per day (bpd) from more than one million in July, while the South Sudan government has shut 45,000 bpd of its production as a civil war raged on.
Brent hit an intraday high of $112.12 a barrel by 0338 GMT, up 22 cents from Tuesday's close, the highest since Dec. 5. U.S. crude rose 28 cents to $99.50, inching closer to a psychological resistance of $100. Both markets were shut for Christmas on Wednesday.
"The North African uncertainty is supporting Brent," said Masaki Suematsu, manager of the energy team at brokerage Newedge Japan. "Most of the news are bullish and the market volume is very thin so prices tend to move higher."
Tribal leaders will hold more talks on reopening several seized oil export ports in eastern Libya but the government will not negotiate with protesters blocking the ports, Prime Minister Ali Zeidan said.
In South Sudan, oil production has dropped to 200,000 bpd after fighting shut down oilfields in Unity state, Petroleum Minister Stephen Dhieu Dau said.
Dau said production in Upper Nile state, where most of South Sudan's oil is extracted, remained safe and outside the reach of rebels.
Traders will be scouring U.S. inventory data for cues on demand in the world's top oil consumer. The U.S. EIA will publish its data on Dec. 27 at 11:00 a.m. EST (1600 GMT) instead of its usual release on Wednesdays due to the Christmas holiday.
U.S. crude stocks unexpectedly rose 716,000 barrels last week as refineries boosted output, while gasoline inventories slumped and distillate stocks dropped, data from industry group the American Petroleum Institute showed on Tuesday.
Analysts had expected oil stockpiles to fall for a fourth straight week and gasoline inventories to rise, a Reuters poll showed.
U.S. gasoline futures held on to gains, supporting crude futures, after rising to the highest in more than three months on Tuesday. - Reuters