Oil prices fell on the US and London markets June 2 upon mixed signals, and some analysts said downside price risks appeared to be increasing from growing oil exports from Iraq and anticipated new production from Angola.
Analysts also noted tensions appeared to be calming in recent days between Russia and Ukraine.
Iraq's crude oil exports increased slightly in May, oil ministry officials reported June 1.
The oil exports averaged 2.582 million b/d during May compared with 2.510 million b/d in April, ministry spokesman Assem Jihad told the Associated Press.
In Angola, production from Total SA’s operations on Block 17 and Eni SPA’s Western Hub on Block 15/06 are expected to start this year. Analysts estimate the new Angola production from Total and Eni together could add 241,000 b/d. Separately, BP PLC and Conoco have exploratory drilling going on in Angola.
Barclays Capital issued a report saying it foresees little prospect of significant oil recovery in Libya during the coming 12 months given political issues there.
“The volatility in crude oil production and the length of outages in Libya are significant for both the commodity market and oil equities,” said Barclays analyst Lydia Rainforth in London. “Sadly we see little prospect of a significant recovery in the coming 12 months.”
The Barclays report said Libya production “is currently languishing” despite rebel agreements reached with government officials in April. “Ultimately the lack of a unified government is set to see the volatility continue.”
The natural gas contract for July gained 7¢ to settle at a rounded $4.61/MMbtu.
Heating oil for July delivery lost 1¢ to a rounded $2.87/gal. Reformulated gasoline stock for oxygenate blending for July delivery relinquished 2.2¢ to a rounded $2.95/gal.
The July ICE contract for Brent crude delivery fell 58¢, closing at $108.83/bbl, while the August contract dropped 52¢ to settle at $108.16/bbl. The ICE gas oil contract for June gave up $2.25 to settle at $890.25/tonne.
The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $105.60 on June 2, down 31¢ from May 30.
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