London: Brent oil held steady above $109 a barrel on Tuesday, as unrest and low output in Opec exporter Libya offset downward pressure from expectations of a weekly build in US crude stocks to a record high.
Libyan oil output has dwindled to about 210,000 barrels per day (bpd), far below pre-crisis levels closer to 1.4 million bpd, with western oilfields still shut after the government said it had reached a deal with protesters to reopen them.
Brent crude was up 15 cents at $109.52 a barrel at 0821 GMT, after settling 38 cents lower on Monday.
US crude for June delivery was 5 cents higher at $102.66 a barrel. The contract expires on Tuesday. US crude for July delivery was up 10 cents at $102.21 per barrel.
“It failed to hold over $110 yesterday and there has been no further deterioration in Libya ... We are in a broad range of $105-$110,” said Christopher Bellew, trader at Jefferies Bache.
“The situation in Libya is essentially not a major change and it leads me to believe that if Libya was exporting as much as it could, we would be closer to $105.” French oil major Total said on Monday it had cut its presence in the Libyan capital, Tripoli, to a minimum due to security concerns following weekend clashes and an attack by a renegade general on parliament. Algerian state energy firm Sonatrach is also evacuating workers.
“None of this bodes well for restoring Libya’s oil output to prewar levels and we contend that the country will remain a phantom menace, hanging over the oil markets for at least the remainder of 2014,” Barclays analysts said in a note.
US commercial crude stocks were expected to have risen by a million barrels in the week to May 16, a preliminary Reuters poll of four analysts showed.
That would take crude inventories to a new record after inventories hit 399.4 million barrels in the week to April 25, the highest since the U.S. government’s Energy Information Administration (EIA) began collecting such data in 1982.
The poll was taken before weekly inventory reports due later on Tuesday from industry group the American Petroleum Institute (API) and on Wednesday from the EIA.
“The summer driving season could provide some support, but the economies aren’t yet showing substantial growth in consumption,” said Jonathan Barratt, chief executive of commodity research firm Barratt Bulletin in Sydney.
“I don’t think there’s a lot out there that can force prices either way. I think we’re stuck in this range for some time.” Europe’s energy commissioner said on Monday progress had been made in the gas price dispute between Russia and Ukraine after talks with Russia’s energy minister and Gazprom.
A new round of talks is scheduled for May 26.
In Norway, Statoil shut oil production at its Snorre B platform in the North Sea and evacuated a quarter of the personnel there after an oil leak.
Output at Snorre field’s two production platforms averaged 88,000 bpd last year, data from the Norwegian Petroleum Directorate showed.
