Sept. 24, 2013, 10:12 a.m. EDT
Oil drops below $103 as supply risk fades
By Laura Mandaro and Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) — U.S. oil futures slid below $103 on Tuesday as a better supply outlook for North Africa and the Middle East squeezed more risk premium out of the market.
Crude oil for November delivery (NMN:CLX3) fell 97 cents, or 1%, to $102.60 a barrel on the New York Mercantile Exchange. Benchmark oil is on track for its seventh loss in eight sessions.
A day earlier, Nymex oil futures closed below $104 a barrel, making for a three-session loss of about 4% as concerns over Middle Eastern supplies continued to ease, in part due to rising output from Libya. Fading expectations for a U.S. military strike in Syria and more exports from South Sudan also improved the supply outlook, dampening prices.
Brent crude for November delivery (IET:UK:LCOX3) fell 25 cents, or 0.3%, to $107.88 a barrel on ICE Futures.
“Brent is thus likely to test last week’s low of $107.4 per barrel. Were it to fall below this level, it could potentially drop down as far as $105.8 per barrel – the lows it marked at the end of July and the beginning of August,” wrote analysts at Commerzbank.
The United Nations chemical-weapons panel was due to vote later Tuesday on a U.S.-Russian agreement to rid Syria of its chemical weapons, with a Security Council vote to follow. President Barack Obama is expected to discuss Syria’s civil war and the U.S. role in the Middle East in a midmorning speech at the United Nations.
Also later Tuesday, the American Petroleum Institute was slated to release its weekly U.S. inventory report, due to be followed by the more closely watched U.S. Energy Information Administration data on Wednesday.
“Imports will likely remain on the low end as light sweet crude-oil supply out of the Mediterranean continues to be tight,” Platts wrote. “However, lower crude-oil runs at U.S. refineries will likely keep a larger decline in crude-oil stocks in check.”
In other energy-futures trading, October natural gas (NMN:NGV13) lost 4 cents, or 1.1%, to 3.64 per million British thermal units. October gasoline (NMN:RBV3) was down less than a cent at $2.62 a gallon.