Oil hits two-week lows on growing glut concerns

LONDON: Oil prices fell to roughly two-week lows yesterday as news of rising Iranian exports and returning supplies from Libya and Nigeria fuelled concerns that the global glut will persist. Benchmark Brent crude futures fell below the $46-a-barrel mark, trading down 1.7 percent at $45.79 a barrel, down 80 cents, at 1045 GMT. US West Texas Intermediate futures were down 73 cents, or 1.7 percent, at $43.18 a barrel, a two-week low. Both contracts have fallen 9-10 percent in one week, underlining how volatile the oil market currently is.

“We’ve seen a lot of bearish news this week: Libya, Nigeria, sceptical monthly reports from the IEA and OPEC and large stockbuilding in the US, so weak fundamentals are weighing on the market,” said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

Iran is nearing its pre-sanctions crude oil export levels after a source familiar with the country’s tanker loading schedules said the third-biggest OPEC producer had raised exports to more than 2 million barrels per day (bpd) in August. Iran’s August crude exports, excluding condensate, roughly doubled from a year ago to 2.11 million bpd, the source said, based on data compiled from tanker loading schedules. Much of Iran’s fresh output has found a home in Asia and Europe. India’s daily oil imports from Iran rose to the highest in at least 15 years in August, according to trade sources and shipping data.

Austria’s OMV said yesterday it had taken delivery of an Iranian crude oil spot delivery in Italy, its first cargo from Iran since 2012. There are also signs of a return of output from Nigeria and Libya, two countries whose crude exports have been hampered by conflict and unrest. Libya has lifted force majeure at some of its main ports and is resuming oil exports, the National Oil Corporation (NOC) said on Thursday. “Exports will resume immediately from Zueitina and Ras Lanuf, and will continue at Brega ... exports will resume from Es Sider as soon as possible,” NOC Chairman Mustafa Sanalla said. In Nigeria, ExxonMobil was making preparations to load a cargo of Qua Iboe crude at the end of September, trading sources said, its first since it imposed force majeure in July. Traders were also eyeing weekly US rig count data, to be released by Baker Hughes yesterday. Last week’s data showed US drillers had added seven oil rigs in the week to Sept. 9, bringing the rig count to 414, the most since February. “The focus will turn to drilling activity in the US, with another rise expected to raise concerns about a recovery in US output,” Australian bank ANZ said in a note. The United States has witnessed more growth in daily output than any other major producer thanks to the boom in shale oil production.