London:Brent crude eased further under $105 on Thursday — to its lowest since November — as oil dealers anticipated a rise in Libyan supply after the government neared a deal with rebels to reopen oil ports.
Brent has dropped more than $3 this week, narrowing its gap with the US oil benchmark — a closely watched and heavily traded spread — to the slimmest since September.
Brent crude slipped 27 cents to $104.52 a barrel by 1143 GMT. US crude, or West Texas Intermediate (WTI), fell 42 cents to $99.20 a barrel.
Hopes were lifted for an end to an eight-month standoff that dried up oil exports and revenue in Libya as a government spokesman said an agreement with rebels to reopen key oil ports could be finalised in two to three days.
The restart of Libya’s eastern oil ports could release about 600,000 barrels per day (bpd) of crude, although some analysts remained cautious.
“The rebels have imposed conditions that are virtually impossible to meet, demanding for example a referendum on greater autonomy in the eastern provinces,” said Commerzbank.
“It is by no means clear that the export terminals will be opened, so we envisage only limited downside potential to at most $103 per barrel (for Brent) ... and expect to see the price recover if the opening of ports were to be delayed.” Libya’s crude output has fallen to around 150,000 bpd from 1.4 million bpd in July when a wave of protests started across the north African country, whose proximity to Europe just across the Mediterranean makes it a strategic energy supplier.
In the short term, demand for Libyan oil is likely to be limited due to reliability issues, while shipping and insurance costs are expected to rise in light of the recent hostilities.
US crude losses were checked by a surprise drop in inventories last week and as stockpiles at WTI’s delivery point in Cushing, Oklahoma, fell for the ninth week, Energy Information Administration data showed.
Brent’s premium to WTI stood at $5.34, off $4.81 reached on Wednesday, its narrowest in more than six months.
Oil may draw support from data showing US companies stepped up hiring in March, offering fresh evidence the economy was regaining momentum after a weather-driven lull over the winter.
