Brent crude declined for a second day as Libya reopened a terminal closed by protests, while Iranian President Hassan Rohani pledged in his inaugural speech to shun extremism and take a moderate approach. Futures dropped as much as 1 percent. Libya’s Marsa el Hrega port reopened and the first crude cargo was exported Aug. 1, according to Naji Mokhtar, the head of the parliamentary energy committee. In Iran, Rohani took his oath of office yesterday, saying the U.S. and the European Union should end sanctions aimed at stopping the Persian Gulf nation’s nuclear enrichment program, which have curbed its oil exports. “Some rapprochement between Iran and the U.S.� could weigh on prices, said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London. “Brent dropped below $106 last week and could head there again soon.� Brent for September settlement lost as much as $1 to $107.95 a barrel on the London-based ICE Futures Europe exchange and traded at $108.37 as of 11:02 a.m. London time. The European benchmark was at a premium of $1.97 a barrel to WTI. The spread was at $2.01 on Aug. 2, widening for the first time in three days. WTI for September delivery was at $106.38 a barrel in electronic trading on the New York Mercantile Exchange, down 56 cents. It earlier gained as much as 0.7 percent. The volume of all futures traded was 2 percent above the 100-day average. China Confidence Oil advanced earlier after China’s non-manufacturing Purchasing Managers’ Index showed the first acceleration since March, according to government data on Aug. 3. The index rose to 54.1 in July from 53.9. The advance follows an unexpected increase in a factory index last week and may bolster confidence that Premier Li Keqiang’s policies are helping to prevent a deeper slowdown. “China has been engaged on a deliberate slow-down policy, seeking to engineer a soft landing,� said Guy Wolf, global head of market analytics at Marex Spectron Group in London. “What is helping is that the U.S. is growing and Europe is bouncing off the bottom.� China will account for 11 percent of world oil demand this year, with the U.S. taking a 20 percent share, according to International Energy Agency data. Goldman Sachs Group Inc. maintained its forecasts that Brent will average $105 a barrel in the coming year, citing an expectation of a “quick resolution� to the disruption of oil exports from Libya. Libyan Exports All but one of Libya’s terminals were shut in July because of a labor disputes. A member of the Organization of Petroleum Exporting Countries, Libya has lost an estimated 4.5 million barrels of crude and 190,000 barrels of condensate shipments, analysts at Goldman said in an e-mailed report on Aug. 2. The Es Sider, Ras Lanuf, Marsa Brega and Zueitina terminals remain closed, Mokhtar, the head of the parliamentary energy committee, said on Aug. 3. Libya, holder of Africa’s largest crude reserves, pumped about 800,000 barrels a day last month, compared with 1.13 million in June, according to a Bloomberg survey of producers and analysts. Iran’s government will take “fundamental steps to elevate Iran’s position based on national interest and the lifting of the oppressive sanctions,� Rohani said in his speech. The U.S. said it will be “a willing partner� if Iran chooses to work toward a peaceful solution to the nuclear issue. Hedge funds reduced net-long positions on WTI by 15,275 futures and options combined, or 4.6 percent, to 318,819 in the seven days ended July 30, according to the Commodity Futures Trading Commission’s weekly report on Aug. 2. That was the first decline in five weeks. The ICE exchange will release similar data at midday London time. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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