MW: New York-traded oil turns lower, alongside Brent
Fight for Tripoli continues
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures wavered in early floor trading Tuesday, getting some support from higher U.S. equities and a lower dollar but unable to extend the previous session’s gains.
Crude oil for October delivery, the new front-month contract, declined 78 cents, or 1%, to $83.67 a barrel on the New York Mercantile Exchange. It had earlier traded as high as $86.06 a barrel, spending most Asian and European trading hours in the black.
Brent crude also traded lower, with the blend’s October contract down 45 cents, or 0.4%, to $107.91 a barrel on ICE Futures in London.
The European benchmark has been under pressure from expectations the four-decade regime of Col. Moammar Gadhafi in Libya is coming to an end, which would mean at least some of the sweet, light Libyan oil back in line.
Exports had ground to a halt after six months of conflict. The oil was mainly finding its way to refineries in southern Europe.
Some doubts emerged about how much of Tripoli is under control of the rebels. One of Gadhafi’s sons, who had been reported captured by rebel forces, made a public appearance and the battle for Tripoli continued.
Analysts have said how fast and how much oil can flow from Libya again will depend on how extensive was the damage to oil installations during the conflict. Read more about expectations around Libya's oil exports.
“The momentum towards a regime change in Libya is gaining steam, but it remains unclear how long it will take to form a transitional government and to ensure sufficient security to enable the restart of the country’s oil production,” analysts at J.P. Morgan said in a report to clients.
“Shokri Ghanem, the former head of Libya’s state oil company, indicated yesterday that he believed that oil production would likely resume a few months after the cessation of unrest in the country, but that pre-war output levels would not be reached for 18 months,” they added.
Energy products also traded lower Tuesday, with September gasoline off 1 cent, or 0.6%, to $2.82 a gallon.
