SINGAPORE – Brent slipped below $113 a barrel on Monday, as supplies disruption fears from Iraq eased after government forces launched a pushback against a Sunni militant oil well takeover.
The European benchmark is still up more than three per cent so far in June, driven primarily by heightened supply worries.
Brent crude lost 42 cents to 112.88 dollars a barrel, after ending the week 1.3 per cent lower.
U.S. crude declined 49 cents to 105.25 dollars a barrel, after sliding nearly 1.4 per cent in the past week.
“We saw some profit-taking last week after sharp gains in prices and we are seeing that continuing,” said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.
“It is a bit difficult to bet on oil on both sides at the moment…”
Brent faces support at 112 dollars a barrel and key resistance at 115 dollars.
Meanwhile, the U.S. contract has strong support a little below 105 dollars and resistance at the 107-108 dollars level, Hasegawa said.
The market also drew comfort as U.S. Secretary of State John Kerry and Saudi King Abdullah briefly discussed global oil supplies during a meeting on the crisis in Iraq.
The meet assured investors that top exporter Saudi Arabia may step in to fill any gap if supplies from Iraq get disrupted.
“We have some guarantee of supply that Saudi Arabia will step in if needed,” said Hasegawa.
A reopened port in Libya and an easing of tensions over the Ukraine crisis also weighed on oil.
“Geopolitical concerns were also eased after news emerged that Libya’s largest oil refinery may reopen in August,” analysts at ANZ said in a note.
“Data released by Libya’s National Oil Corp showed production has risen to 321,000 barrels per day last week.”
The European Union signed a historic free-trade pact with Ukraine on Friday.
EU also warned it could impose more sanctions on Moscow unless pro-Russian rebels act to wind down the crisis in the east of the country by Monday.
Investors are awaiting key economic numbers due later this week to gauge the outlook for the United States and the global economy to assess the direction for oil markets.
Data due this week includes the June payrolls report on Thursday, a day early due to the July 4 holiday.
Economists polled by media expect jobs to rise 213,000 in June for a fifth straight month of gains above 200,000, a run unmatched since the September 1999-January 2000 period. (Reuters/NAN)