Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Oil holds below $112, heads for 3rd-highest annual average

Send a link to a friend 

[December 26, 2013]  By Alex Lawler

LONDON, Dec 26 (Reuters) — Oil eased below $112 a barrel on Thursday as French workers extended a strike at two refineries and U.S. stockpiles rose, although supply disruptions in Africa and positive U.S. jobs data underpinned prices.

Brent crude is heading for an annual average of $108.66 in 2013, the third-highest ever, supported by outages in Africa, the Middle East and the North Sea. Last year's average of $111.68 is the record, followed by $110.91 in 2011.

At 1425 GMT, Brent crude was down 18 cents at $111.72 a barrel after touching an intraday high of $112.12, the highest since Dec. 5. U.S. crude was up 18 cents at $99.40. Both markets were shut for Christmas on Wednesday.

"Today should be another slow trading day," said Olivier Jakob, an analyst at Petromatrix in Switzerland. "We will mainly focus on the continuation or not of the French refinery strikes."

Workers extended a strike at two French refineries, while lifting action at a third plant, the CGT union said. The action, in addition to poor refinery margins, has weighed on European crude demand, say analysts.


U.S. crude drew support from jobs data showing the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly a month, a hopeful sign for the labour market in the world's top oil consumer.

Supply outages in Africa are also in focus. The government in South Sudan, which is threatened by civil war, has shut 45,000 barrels per day (bpd) of production, and export terminals remain closed in Libya, where output is around a tenth of the 1 million bpd it pumped in July.

"The North African uncertainty is supporting Brent," said Masaki Suematsu, manager of the energy team at brokerage Newedge Japan. "Most of the news is bullish and the market volume is very thin so prices tend to move higher."

Tribal leaders will hold more talks on reopening ports in eastern Libya but the government will not negotiate with protesters blocking them, the prime minister said.

[to top of second column]

In South Sudan, production has dropped to 200,000 bpd after fighting shut down fields in Unity state, the oil minister said, although output in Upper Nile state, where most of South Sudan's oil is extracted, remained unaffected.

While outages have supported prices this year, higher production and subdued demand growth could depress Brent to an average of $103.50 in 2014, according to analysts in a Reuters survey.

In other supply developments, U.S. crude stocks unexpectedly rose by 716,000 barrels last week as refineries boosted output, a report from industry group the American Petroleum Institute said on Tuesday.

Traders will be looking to the U.S. government's Energy Information Administration report to confirm the trend. The data is due on Dec. 27 at 11:00 a.m. EST (1600 GMT), delayed from its usual Wednesday release by the Christmas holiday.

(Reporting by Florence Tan and Alex Lawler; editing by John Stonestreet and David Evans)

[© 2013 Thomson Reuters. All rights reserved.]

Copyright 2013 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

< Recent articles

Back to top