Brent Falls, US Crude Rises As Global Demand Seen Weak
NEW YORK, Aug 28 (Reuters) - Brent crude oil fell and U.S. crude rose as ample global supply and lackluster demand pressured the global benchmark while positive U.S. economic data supported oil prices in the world's largest oil consumer.
U.S. gross domestic product expanded at a 4.2 percent annual rate instead of the previously reported 4.0 percent pace, the Commerce Department said on Thursday, reflecting upward revisions to business spending and exports.
Separate reports showed a second consecutive week of declines in the number of Americans filing new claims for unemployment benefits and a jump in home purchase contracts.
"There's better demand here in the U.S. than versus Europe," said Phil Flynn, an analyst with the Price Futures Group in Chicago, Illinois.
Oil supply is expected to exceed demand this year, analysts forecast, and crude oil benchmarks on both sides of the Atlantic Basin are on track to post a second monthly decline.
October Brent crude fell by 26 cents to settle at $102.46 a barrel. Last week, the contract hit a 14-month intraday low of $101.07 and it has been unable this week to break out of the $101-$104 range.
U.S. crude for October rose 67 cents to settle at $94.55 a barrel.
The spread between the two benchmarks widened to $9.15 during the session, then narrowed to settle at $7.91.
"Brent-U.S. crude pushed above $9 again and that's a pretty lofty premium given that we don't have a supply disruption," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
Political instability in Iraq and Libya continued to weigh on investors' minds, even though oil exports from the two countries have actually risen in recent months.
Libya's National Oil Corp (NOC) said on Thursday the country's oil production had risen to 665,000 barrels per day (bpd) from 650,000 bpd earlier this week.
Analysts say a revival of Libya's oil industry may be short-lived as armed groups and two parliaments fight for control of the North African country.
An Islamist insurgency in Iraq also threatens to derail long-term output plans set by OPEC's second largest producer.
Rapid rises in North American oil production over the last three years have more than compensated for output losses due to conflicts in the Middle East and North Africa, the U.S. Energy Information Administration (EIA) says.
U.S. oil production grew by more than 4 million barrels per day (bpd) between January 2011 and July 2014. During the same period, 2.8 million bpd of global oil production was knocked out by unplanned supply outages, the EIA said on Wednesday.
Global oil demand has increased less than expected over the last few years and analysts say the developing trade dispute over the Ukraine crisis could also help curb fuel consumption.
Hopes that the presidents of Russia and Ukraine could reach a ceasefire deal dimmed after Ukraine accused Russia of launching a new military incursion.
(Additional reporting by Christopher Johnson in London, Florence Tan in Singapore; editing by David Clarke, David Evans and Chizu Nomiyama)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds