London: Brent crude oil fell to around $104 a barrel on Tuesday, touching its lowest level in nine months as steady supplies dispelled concerns over potential disruptions in producers including Iraq and Libya.
The International Energy Agency (IEA) said while the situation in several key oil-producing countries “remains more at risk than ever”, supplies were ample and the Atlantic Basin was even reported to be facing a glut.
Opec output rose by 300,000 barrels per day (bpd) to a five-month high of 30.44 million bpd in July, it said, citing gains in Saudi Arabia and Libya.
“In terms of the physical side of things, particularly for Brent, there are pretty high inventories at the Atlantic Basin at the moment and that’s holding back gains,” said Ankit Pahuja, a commodity strategist at investment bank ANZ.
Iraq, already fighting Isil militants in the north of the country, on Monday named a new prime minister, setting off a political showdown in Baghdad as incumbent Nouri Al Maliki refused to leave his post.
But oil markets were not reacting to such conflicts as there have still been no supply disruptions, said ANZ’s Pahuja.
September Brent crude was down 69 cents at $103.99 per barrel by 0912 GMT after touching a low of $103.65, its lowest level since November 2013. The contract closed on Monday at $104.68, off 34 cents. US crude was trading down 68 cents to $97.40 a barrel.
As Opec’s second-largest oil producer, any sign of disruption to Iraq’s oil supplies could lift oil markets, as seen in mid-June when violence there as well as in Ukraine and Libya helped send Brent above $115 a barrel.
Yet production in Iraqi Kurdistan remains unaffected by the incursion by Isil militants and exports from southern Iraq in July held at near record levels of around 2.5 million bpd.
In Libya, despite clashes between rival armed factions in Tripoli and Benghazi, output remains around 450,000 bpd, a National Oil Company spokesman said on Monday.
The IEA said Libya’s output rose by 190,000 bpd in July to 430,000 bpd.
Tensions between the West and Russia over Ukraine have also failed to impact oil markets for now.
President Vladimir Putin said on Monday that Russia is sending an aid convoy to eastern Ukraine despite urgent Western warnings against using humanitarian help as a pretext for an invasion.
Oil markets awaited weekly US oil stocks data, due to be published later on Tuesday and on Wednesday.
US commercial crude oil stocks were forecast to have fallen 2.2 million barrels in the week to August 8, a preliminary Reuters survey of six analysts showed on Monday.
