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December 12, 2013

Brent crude trades above $108 ahead of resumption of Libya supply

Brent crude held above $108 a barrel today as traders anticipated an increase in the Libyan oil supply following announcement of the government's plans to reopen three eastern ports.

By admin-demo

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Brent crude held above $108 a barrel today as traders anticipated an increase in the Libyan oil supply following announcement of the government’s plans to reopen three eastern ports.

After slipping by more than 2% this week, Brent crude increased by nine cents to $108.76 a barrel, while US crude was down by one cent to settle at $97.49 a barrel, reported Reuters.

Libyan Prime Minister Ali Zeidan said on Wednesday that the government expected eastern tribes to reopen three oil ports over the weekend.

Reopening of three eastern ports could increase output at the OPEC producer from the current 250,000bpd.

US oil rose slightly in the early session with expectations for increased demand as new pipeline projects promise to relieve a glut of oil at the domestic storage hub. The demand picture remains unclear however, and investors are waiting for the outcome of a US Federal Reserve meeting which is scheduled for next week.

The investors are hopeful that the US Federal Reserve would soon start scaling back its stimulus programme, which has supported commodity prices.

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The US central bank has been buying $85bn worth of bonds a month to free up cash reserves at banks and stimulate lending.

Traders are also keeping an eye on the progress of talks between Tehran and six world powers about implementation of a landmark nuclear deal that could ease sanctions on Iranian oil and increase supply.

Prices were also under pressure with two new pipelines belonging to TransCanada and Shell set to drain oil from the Cushing depot in the next few months.


Image: Oil traders are expecting supplies resumption from Lybia as three eastern ports set to open. Photo: courtesy of freedigitalphotos.net.

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