WTI crude snapped a three-day gain. Syrian government forces started an offensive against rebels, renewing concern that conflict may destabilize the Middle East.
Futures declined in New York after rising for a third day on May 17. Government forces entered the city of al-Qusair, state television said yesterday. At least 52 people died and hundreds were injured in the clashes, the Coventry, England-based Syrian Observatory for Human Rights said. Saudi Arabia reduced exports in March, while West African members of OPEC increased shipments, according to official data.
“Syria is a microcosm of the unrest across the Middle East and could spread to other countries,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London.
West Texas Intermediate for June delivery dropped as much as 61 cents, or 0.6 percent, to $95.41 a barrel in electronic trading on the New York Mercantile Exchange, and was at $95.52 at 9:10 a.m. London time. The volume of all contracts traded was 5.3 percent above the 100-day average. The more-active July future slid 56 cents to $95.73. Front-month prices increased 86 cents to $96.02 on May 17, the highest close since May 10.
Saudi Exports
Brent for July settlement dropped 30 cents to $104.34 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark was at a premium of $8.60 to WTI futures, up from $8.35 on May 17.
“Traders always get nervous when these kinds of things are going on, as Middle East tension plays on prices,” said Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management. “If fighting in Syria spills over into Iraq and interrupts production there, that would be problematic,”
Brent’s rally is stalling as prices approach technical resistance along the 50-day moving average, according to data compiled by Bloomberg. Futures halted an intraday advance on May 17 near this indicator, around $105.05 a barrel today. Sell orders tend to be clustered close to chart resistance levels.
Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, shipped 7.42 million barrels a day, down 30,000 barrels from February, figures published yesterday from the Joint Organizations Data Initiative show. Angola and Nigeria both increased shipments, with Angola exporting 1.74 million barrels a day, up from 1.59 million, to the highest in three years, according to the data.
Money managers increased net-long positions, or wagers on higher prices, in WTI by 606 futures and options combined, or 0.3 percent, to 205,140, in the seven days ended May 14, according to the Commodity Futures Trading Commission’s May 17 Commitments of Traders report. It was the third weekly gain.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
