Tuesday 28 May 2024

Brent climbs towards $111; gold steady

Singapore, September 21, 2012


Brent crude rose towards $111 on Friday, extending its gains from a 1-1/2 month low hit in the previous session, as Libya's precarious security situation and lower North Sea production stoked supply fears.
Meanwhile, gold firmed slightly, reversing two straight sessions of losses, as investors pinned hopes on recent central bank moves to further lift sentiment in precious metals.
Opec member and Africa's third biggest producer Libya swiftly ramped up oil output after last year's revolution, but an assault last week on the US consulate heightened fears about the new government's ability to impose its authority, and this is likely to delay the already-slow return of expatriate oil workers to the country.
"We saw oil prices spike up around 30-32 percent last year when Libya was out of the market," said Natalie Rampono, a commodity strategist at ANZ.
"This is something to focus on, especially if the security situation deteriorates," she added.
Brent rose 47 cents to $110.50 a barrel at 0610 GMT, after hitting a high of $110.75 earlier in the session. Brent hit a low of around $107 per barrel on Thursday, its weakest since August 3.
US crude was up 71 cents at $93.13 a barrel. The October contract expired on Thursday at $91.87 a barrel.
Brent futures are down 5.3 percent so far this week, heading for their steepest drop since late June, after key exporter Saudi Arabia pledged to keep prices low, the US mulled release of strategic reserves and the still weak global economy kept demand subdued.
US crude is also down about 6 percent for the week, poised for its biggest weekly drop in about four months.
Adding to the worries about supply disruptions, two more cargoes of North Sea Forties crude loading in October were delayed because of lower production.
Export delays in September and October have been the most significant since May's loading programme, when 11 Forties cargoes out of 19 originally planned were deferred, according to Reuters records based on information from trade sources.
The North Sea Forties crude is the most important of the four grades that form the Brent crude basket, and disruptions in its supply exert more influence on the benchmark's prices.
The 200,000-bpd Buzzard field, the largest connected to the Forties pipeline, began a shutdown around September 5 that is expected to take 28 days. Traders said it was now expected to restart three to five days later than originally planned.
Gold has been hovering near a 6-1/2-month high of $1,777.51 an ounce, hit after the US Federal Reserve announced a new round of quantitative easing and pledged to keep rates low until
 mid-2015, boosting appetite for gold, which benefits from a low-interest rate environment.    
Spot gold inched up 0.2 percent to $1,770.76 an ounce by 0622 GMT, little changed from a week earlier. US gold edged up 0.2 percent as well, to $1,773.50.
Technical analysis suggested spot gold could climb to $1,800 an ounce during the day, said Reuters market analyst Wang Tao. - Reuters

Tags: Oil | Brent | Crude |


calendarCalendar of Events