• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours How Far Have We Really Gotten With Alternative Energy
  • 14 hours If hydrogen is the answer, you're asking the wrong question
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 1 day Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 5 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)

Crude Prices Ease Despite Conflicts In Key Energy Countries

OPEC member countries produced generous amounts of crude during July, causing a “glut” in the supply of oil, despite conflicts involving oil countries that have led to concerns of possible disruptions, the International Energy Agency (IEA) reports.

The cost of Brent crude on Aug. 12 fell to its lowest level since Nov. 8, 2013, and another benchmark, West Texas Intermediate, was also down. Meanwhile, OPEC output climbed to its highest level in five months, and the IEA slashed its estimates for the growth in demand for oil for 2014 and 2015. The IEA, based in Paris, advises 29 nations on energy policy.

“The IEA report knocked the market pretty hard today,” Bill Baruch, a senior market strategist at Iitrader.com in Chicago, told Bloomberg News. “Demand worry has really been moving the market.” He said only a major supply disruption could lift oil prices in this environment.

In its report, the IEA reduced its calculations for the growth of worldwide demand for oil by 180,000 barrels a day for 2014 and by 90,000 barrels a day in 2015. It said the yearly growth in fuel consumption fell to 700,000 barrels a day in the second quarter of 2014, the lowest since early 2012.

The agency said fighting in countries linked to oil production was putting the supply of crude “more at risk than ever,” yet oil producers seemed to be shrugging off these conflicts. “Despite armed conflict in Libya, Iraq and Ukraine,” it said, “the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic Basin.”

Oil production in Libya is fairly steady, a spokesman for Libya’s National Oil Co. said on Aug. 11. This comes despite continuing bloodshed between armed factions in the country’s two largest cities, Benghazi and Tripoli, the capital. In fact, the IEA said that during July, Libya’s output rose by 190,000 barrels per day to 430,000 barrels per day.

In Iraq, production in the northern Kurdish regions has remained largely unchanged, the IEA said, despite encroachments by the militant fighters of the Islamic State. And the agency said oil exports from southern Iraq were steady at near-record levels of 2.5 million barrels per day.

Then there is the fighting in eastern Ukraine between Russian-backed separatists and regular Ukrainian forces. The United States and the European Union have imposed strong sanctions on Russia, especially its oil sector, for its involvement in the conflict, but these measures haven’t affected oil output.

ADVERTISEMENT

“Short-term supply disruptions do not seem on the cards,” the IEA report said, even as the sanctions are expected to reduce demand for Russian oil.

By Andy Tully of Oilprice.com



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News