Crude oil on both sides of the Atlantic fell on Thursday as fears eased over export disruptions from war-ravaged Iraq, allowing market participants to take some profit off the table.
Assurances from United Nations Iraq Special Envoy Nickolay Mladenov that Iraq's southern oilfields, which produce most of the nation's 3.3 million barrels per day, remained unaffected, cooled Brent prices. Iraq is OPEC's second-largest producer.
"I think you're seeing some profit-taking. The market's letting some pressure out," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
Brent has retreated from a nine-month high of $115.71 per barrel set a week ago on fears that the fighting in Iraq could split the country and hurt oil exports.
Weaker-than-expected economic data from the U.S. pressured domestic crude prices, which had followed Brent's climb, reaching its own nine-month high on June 20.
"The [U.S.] economy is on tenterhooks and oil prices are very high," said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania. "It's getting to a point where oil is overbought."
Brent crudelost 79 cents to settle at $113.21, its lowest settlement since June 16.
U.S. crudelost 66 cents to settle at $105.84, the lowest settlement since June 11.
The spreadbetween the two benchmarks narrowed to close at $7.37, after it had widened to $9.01 last week, its widest point since March.
U.S. equities fell following comments by St. Louis Fed President James Bullard that interest rate increases should come sooner rather than later, taking U.S. crude down alongside. [.N]
FIGHTING OVER BIG REFINERY
Insurgents and Iraqi government forces continued to fight on Wednesday for control of the country's largest refinery, the 300,000-barrel-per-day Baiji complex, and troops were airlifted to the site by helicopter.
Militants attacked one of Iraq's largest air bases and seized control of several small oilfields on Wednesday as U.S. special forces troops and intelligence analysts arrived to help Iraqi security forces counter the mounting Sunni insurgency.
Iraqi forces launched an airborne assault on rebel-held Tikrit on Thursday with commandos flown into a stadium in helicopters, at least one of which crashed after taking fire from insurgents who have seized northern cities.
Iraq's self-ruling Kurds outlined plans on Wednesday to ramp up oil exports since their forces have seized control of Iraq's main northern oilfields.
Oil output in Libya rose to 300,000 bpd after the El Feel field increased production, further pressuring prices.
DATA DISAPPOINTS
Michael Hewson, an analyst at CMC Markets, said disappointing U.S. economic data helped to cap oil prices.
U.S. consumer spending rose less than expected in May, which could prompt economists to temper their second-quarter growth forecasts.
The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the sharpest decline in five years, instead of the 1.0 percent pace it had reported last month.
"GDP growth was pathetic, and we shook it off yesterday, but I think it's definitely weighing on prices," said Phil Flynn, analyst with the Price Futures Group in Chicago, Illinois.
On Tuesday, the U.S. Department of Commerce ruled that some energy companies may export a variety of ultra-light oil if it has been minimally refined, in what may be a marginal loosening of a decades-old ban on selling U.S. crude abroad.
Enterprise Products Partners, one of two companies given Commerce Department approval to export condensate, said it could start exporting any time.
Source: Reuters
Assurances from United Nations Iraq Special Envoy Nickolay Mladenov that Iraq's southern oilfields, which produce most of the nation's 3.3 million barrels per day, remained unaffected, cooled Brent prices. Iraq is OPEC's second-largest producer.
"I think you're seeing some profit-taking. The market's letting some pressure out," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
Brent has retreated from a nine-month high of $115.71 per barrel set a week ago on fears that the fighting in Iraq could split the country and hurt oil exports.
Weaker-than-expected economic data from the U.S. pressured domestic crude prices, which had followed Brent's climb, reaching its own nine-month high on June 20.
"The [U.S.] economy is on tenterhooks and oil prices are very high," said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania. "It's getting to a point where oil is overbought."
Brent crude
U.S. crude
The spread
U.S. equities fell following comments by St. Louis Fed President James Bullard that interest rate increases should come sooner rather than later, taking U.S. crude down alongside. [.N]
FIGHTING OVER BIG REFINERY
Insurgents and Iraqi government forces continued to fight on Wednesday for control of the country's largest refinery, the 300,000-barrel-per-day Baiji complex, and troops were airlifted to the site by helicopter.
Militants attacked one of Iraq's largest air bases and seized control of several small oilfields on Wednesday as U.S. special forces troops and intelligence analysts arrived to help Iraqi security forces counter the mounting Sunni insurgency.
Iraqi forces launched an airborne assault on rebel-held Tikrit on Thursday with commandos flown into a stadium in helicopters, at least one of which crashed after taking fire from insurgents who have seized northern cities.
Iraq's self-ruling Kurds outlined plans on Wednesday to ramp up oil exports since their forces have seized control of Iraq's main northern oilfields.
Oil output in Libya rose to 300,000 bpd after the El Feel field increased production, further pressuring prices.
DATA DISAPPOINTS
Michael Hewson, an analyst at CMC Markets, said disappointing U.S. economic data helped to cap oil prices.
U.S. consumer spending rose less than expected in May, which could prompt economists to temper their second-quarter growth forecasts.
The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the sharpest decline in five years, instead of the 1.0 percent pace it had reported last month.
"GDP growth was pathetic, and we shook it off yesterday, but I think it's definitely weighing on prices," said Phil Flynn, analyst with the Price Futures Group in Chicago, Illinois.
On Tuesday, the U.S. Department of Commerce ruled that some energy companies may export a variety of ultra-light oil if it has been minimally refined, in what may be a marginal loosening of a decades-old ban on selling U.S. crude abroad.
Enterprise Products Partners
