Sunday, July 7, 2013

Oil prices escapes after affects of Egypt Crisis, lowers after a spike earlier in week

LONDON: West Texas Intermediate oil retreated from the highest level in 14 months as the ouster of Egypt's president without widespread violence and continued shipments through the Suez Canal eased concern of a supply disruption.


Futures fell as much as 0.5% in New York after advancing for a third day on Wednesday. Egypt's army forced Mohamed Morsi from power a year after his election, and a military-appointed interim president, Adly Mansour, was sworn in.

The political turmoil hasn't interrupted flows through Suez or a pipeline running through the most populous Arab country.

"The situation eases somewhat after the toppling of Morsi, which leads to moderate downward pressure on prices," said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.

"But it is still too early to say that the situation is improving significantly, hence, supply risks will continue to lend support to prices."

WTI for August delivery was at $101.10 a barrel, down 14 cents, in electronic trading on the New York Mercantile Exchange at 2:15 pm London time. The volume of all WTI futures traded was 74% below the 100-day average.

The US benchmark crude rose $1.64, or 1.7%, to $101.24 on Wednesday, the highest settlement and first above $100 since May 3, 2012. There was no floor trading in New York on Thursday because of the US Independence Day holiday. Electronic transactions will be booked on Friday for settlement purposes.

Loading programs Brent for August settlement lost 43 cents to trade at $105.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $4.22 to WTI contracts, from $4.52 on July 3.

The spread was $4.40 on July 2, the narrowest based on closing prices since January 4, 2011. North Sea oil field operators (will) plan to release August loading programs for various grades of crude on July 4 and 5, including the four varieties that make up the Dated Brent price benchmark.

The Bank of England held its benchmark interest rate steady on Thursday, in line with a survey of economists, in its first meeting since the appointment of Governor Mark Carney.

The European Central Bank also kept interest rates unchanged on Thursday, as forecast by a Bloomberg economist survey. "Thin trading volumes due to the US holiday and the ECB meeting can add to volatility in prices," Fritsch said.

indiatimes.com

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