Brent Oil Rallies Above $102 on Geopolitical Tensions
Brent crude oil rose on Monday and U.S. crude fell in light trading, as support from geopolitical tensions in Ukraine and Libya countered ample supplies and anticipated weak demand after a slew of disappointing economic data from the United States and Europe.
“Liquidity is down because of the holiday in London and the usual August vacation time, And while the market continues to see increasing geopolitical risk in Libya and the Russia, Ukraine situation, traders are more focused so far on concerns about slowing demand with the weak data from Europe and the United States,” said Phil Flynn, analyst at Price Futures Group in Chicago, referring to a fall in new home sales and cooling services sector activity in the United States, and weak business sentiment in Germany.
Brent crude rose 30 cents to hold above $102 a barrel, after hitting a 14-month low of $101.07 on Aug. 19. U.S. crude was down 30 cents to settle at $93.35 a barrel.
London financial markets are closed because of a national bank holiday. Brent crude has traded largely within a $101 to $106 range in August, and U.S. crude has mostly remained between $93 and $99.
Underlining the extent of the recent selling pressure, exchange data on Monday showed hedge funds and other big speculators, in the week to Aug. 19, cut their bets on rising Brent prices to the lowest in more than two years.
A further recovery in Libyan output, last reported to be 612,000 barrels per day (bpd), looks uncertain, analysts say. Rockets hit an airport in eastern Libya on Monday, a day after fire destroyed the terminal at Tripoli’s main airport.
In Europe, Russian President Vladimir Putin will meet his Ukrainian counterpart Petro Poroshenko for the first time in months on Tuesday to try to reach a compromise on Ukraine.
Source: CNBC
