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 Weighed down by expectations oil shipments from some shuttered
Libyan ports would resume soon, Brent finished the year just 31
cents its end-2012 level of $111.11 a barrel. The international
benchmark traded in a $22 range from $96.75 to $119.17 this year,
the narrowest band since 2006.
U.S. crude closed the year 7.2 percent firmer as traders headed into
2014 eyeing improving demand, the end of the Federal Reserve's
monetary stimulus and the dramatic overhaul of the world's largest
oil market caused by the shale revolution.
U.S. crude traded within a $27 range throughout 2013, also the
narrowest band since 2006.
U.S. crude stocks fell by 5.7 million barrels last week as imports
dropped, while gasoline and distillate inventories rose, data from
industry group the American Petroleum Institute showed on Tuesday.
Analysts had forecast a decrease of 3 million barrels.
Brent's premium to U.S. crude, or West Texas Intermediate (WTI)
traded at just over $12 a barrel on Tuesday, down from more than $19
a barrel at the end of last year. In July, the two benchmarks
reached parity and WTI briefly rose above Brent for the first time
since 2010.
"We saw quite a lot of drama in those spreads in 2013; that was the
trade of the year," said Katherine Spector, head of commodities
strategy at CIBC World Markets.
"It's still trying to find that equilibrium. I think we'll continue
to see WTI trade $10 to $12 under Brent."
Brent crude fell 41 cents on the day to end 2013 at $110.80 a
barrel, 0.3 percent lower on the year.
U.S. oil fell 87 cents on Tuesday to end at $98.42 a barrel, after
closing 2012 at $91.82 a barrel.
"There's been some optimism about the potential return of supplies
from South Sudan and Libya, and that's probably what's helped Brent
down," said Amrita Sen, chief analyst at consultants Energy Aspects.
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Violence in South Sudan has reduced crude output by about a fifth to
200,000 barrels per day (bpd), but the South Sudanese government and
rebels loyal to former Vice President Riek Machar agreed on a
ceasefire on Tuesday as they prepare for talks to end the bloodshed.
In Libya, where protests have slashed output to less than 250,000
bpd from 1.4 million bpd in July, the Sarir and Messla oilfields are
up and running. But the Hariga oil port they connect with, which
officials had said was to open soon, needs to reopen before exports
can resume.
In addition to the Libyan disruptions, unrest in Iraq and tensions
between Iran and the West over Tehran's disputed nuclear program
supported crude prices throughout 2013.
These factors have offset concerns over a weak demand outlook in
industrialized nations and a slowdown in consumption in China, the
world's second-biggest oil consumer.
Chris Tevere, senior strategist at Gain Capital, said the Middle
East remained a focus for 2014.
"The key concern is still 'Are there any further troubles brewing in
the Middle East?'"
(Additional reporting by Joshua
Franklin in London and Manash Goswami in Singapore; editing by Angus MacSwan, Dale Hudson, Andrew Hay, Marguerita Choy and Andre Grenon)
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