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Market Assessment - What's moving the Oil Markets?
Global crude futures were slightly firmer in the late morning European
trading session Friday, with buoyant equity bourses and the supply disruption
in Nigeria cited as supporting factors.
At 12:13 BST (1113 GMT), the August ICE Brent futures contract traded at
$71.80/b, a 74 cent rise. The NYMEX WTI contract meanwhile added 74 cents to
the overnight settle, trading at $72.11/b.
"The market is stronger this morning. We seem to have broken through
yesterday's resistance of $71.50/b," a London-based crude broker said.
"The stock market and the ongoing supply issue with Nigeria seems to be
keeping the market supported," he added.
"Broadly speaking we are still in the same $68.50-$72.50/b range."
The prompt structure was said to be firmer as buying on prompt spreads
followed a tighter physical market. Traded volume was said to be thin with one
source saying, "There is not too much weight behind [the rise]."
Nigeria's main militant group, the Movement for the Emancipation of the
Niger Delta, said Friday it had bombed an oil pipeline operated by Italy's Eni
in the southern Bayelsa state.
MEND said in a statement that the pipeline which "delivers crude oil to
the Brass export terminal" was blown up at the Nembe creek.
The latest clashes came barely 72 hours after MEND attacked a major oil
pipeline operated by Shell in the same Bayelsa state which forced the company
to shut in another 180,000 b/d of production, according to company sources
(see story at 1053GMT).
"We will be going into the weekend with some legitimate geopolitical
concerns," energy analyst Olivier Jakob said in a Petromatrix report.
The situation in Iran is also being cited as a geopolitical factor that
could further roil the crude complex.
"We suspect that energy prices will retain their firm tone heading into
the weekend, especially given the unsettled situation in Iran," energy analyst
Edward Meir said in an MF Global report.
"This remains a very fluid and potentially dangerous situation, with the
ultimate outcome remaining unpredictable for both the country and the oil
markets," he added.
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