SINGAPORE — Brent crude slipped below $103 a barrel Yesterday to trade near its lowest level in more than a year as ample supply countered any disruption risks posed by lingering tension in Iraq and Libya.
It was the fourth day of losses for the oil benchmark and comes after the International Energy Agency pointed to high supplies and even a glut in the Atlantic Basin.
Output from the Organisation of the Petroleum Exporting Countries (Opec) rose to a five-month high of 30.44-million barrels a day in July, as increased production from Saudi Arabia and Libya more than offset declines in Iraq, Iran and Nigeria.
September Brent crude slipped 22c to $102,80 a barrel by early morning. The contract, which expires on Thursday, fell to as low as $102,65 on Tuesday, its weakest since July 1, 2013.
US crude fell 17c to $97,20 a barrel, slipping for a second consecutive session.
Energy prices had retreated in view of Opec’s ability to ramp up production and the absence of negative news on supply, despite political conflict, OptionsXpress markets analyst Ben le Brun said in Sydney.
The unrest in Iraq has yet to disrupt supply from the second-biggest Opec producer even as the Obama administration has sent about 130 additional military personnel to Iraq as Washington seeks to help Iraq contain the threat posed by hardline militants from the Islamic State.
The immediate concern for investors was upcoming Chinese data and US retail sales, Mr le Brun said. “The Chinese economic data due later in the session today should be a short-term driver for oil pricing,” said Mr le Brun.
A slew of Chinese data, including industrial output and retail sales for July due out at 5.30am GMT should give further clues on the state of the world’s second-biggest economy and second-largest oil consumer.
While recent data have pointed to strong manufacturing activity and exports, a weaker services sector and imports suggest more stimulus measures may be needed to ensure a sustained recovery.
China’s factory output was expected to have grown by an annual 9% in July, compared with 9.2% in June, mainly due to a higher comparison base a year ago, a Reuters poll of analysts found.
In the US, the Energy Information Administration will release its weekly crude stockpiles report. The agency said on Tuesday that US crude oil production had averaged an estimated 8.5-million barrels a day in July, the highest level since April 1987.
Data from industry group American Petroleum Institute showed that US crude inventories had risen 229,000 barrels in the week to August 8 to 364.2-million, in contrast with analysts’ expectations for a decrease of 2-million barrels.-Reuters