Oil dips, supply issues in focus

TOKYO: Oil prices edged lower yesterday after international benchmark Brent hit a fresh five-month high in the previous session, but concerns over global supplies kept prices well supported.

Brent crude oil futures were at US$71.46 a barrel at 0233 GMT, down nine cents, or 0.1 per cent, from their last close, having hit their highest since Nov 12 on Friday at US$71.87.

US West Texas Intermediate (WTI) crude futures were at US$63.63 per barrel, down 26 cents, or 0.4 per cent, from their last settlement.

“I would expect oil to trade in a relatively tight band around US$70 per for the time being,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore, pointing to mixed signals on supply from the US and the Organisation of the Petroleum Exporting Countries (Opec) and its allies.

The head of Libya’s National Oil Corp warned on Friday that renewed fighting could wipe out crude production in the country.

Opec and its allies meet in June to decide whether to continue withholding supply.

Opec, Russia and other producers, are reducing output by 1.2 million barrels per day (bpd) from Jan 1 for six months.

“Leading edge indicators on US supply suggest activity levels are stepping up which is supportive for strong production growth in the second half,” said Chauhan

But at the same time, “murmurings from various ministers of the Opec+ pact suggest supply from the group will not be ramped up preemptively as per last summer,” he said. — Reuters