Brent at 5-month low below $105 as Libya oil deal expected
A Libyan government spokesman said an agreement with the rebels to reopen key oil ports could be reached in days
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 U.S. oil benchmark - a closely watched and heavily traded spread - to the slimmest since September.
Brent crude slipped 12 cents to $104.67 a barrel by 9:55 GMT. U.S. crude, or West Texas Intermediate (WTI), fell 36 cents to $99.26 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 finalized 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.
"I won't rule out the possibility that it might be another empty promise but it definitely has an impact on market sentiment," Phillips Futures analyst Tan Chee Tat said.
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.
U.S. 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
Oil may draw support from data showing U.S. companies stepped up hiring in March, offering fresh evidence the economy was regaining momentum after a weather-driven lull over the winter.
Also Read
-
U.S. navy hands oil tanker to Libya
The North Korean-flagged tanker was seized after the vessel took to sea with crude oil illegally loaded at a Libyan rebel-held port Middle East -
U.S. to hand over tanker with contraband oil back to Libya
The tanker had been escorted by the USS Stout, a guided-missile destroyer Middle East -
U.N. Security Council authorizes boarding Libya rebels’ oil tankers
U.S. Ambassador to the U.N. Samantha Power urged members of the United Nations to implement the resolution swiftly World News
