Oil climbs past $109, still heads for weekly loss
Sep 20 2013 , London
Global benchmark Brent crude was still heading for a weekly decline on the return of some Libyan output, a reduced prospect of military action against Syria and signals from Iran that it is looking for a thaw in relations with the West.
Brent crude for November was up 49 cents to $109.25 by 1028 GMT. Earlier in the session, the benchmark had fallen over 3 percent over this week and was on track for its steepest weekly decline since mid-June. U.S. crude for October dropped 32 cents to $106.07.
Althougth Libya's production has recovered to 620,000 barrels per day (bpd) after protesters agreed to reopen some oilfields, some say it is too early to dismiss the prospect of further disruption.
"Supply tightness seems to be easing but Libya's export recovery is not something that's being assured," said Sijin Cheng, an analyst at Barclays.
Libyan output had collapsed to below 200,000 bpd in a stalemate between protesters and the government that lasted more than a month. As well as Libya, significant supply remains offline in Nigeria and in southern Iraq.
World shares steadied at a five-year high on Friday, while bonds and other commodities were consolidating after the Fed's shock decision announced on Wednesday to keep its monetary stimulus intact.
Lending support to prices, U.S. crude inventories fell 4.37 million barrels last week to 356 million barrels, their lowest level since March 2012, according to data issued by the U.S. Energy Information Administration on Wednesday.
Iranian President Hassan Rouhani has sent signals that he is looking for a thaw in relations with the United States. The White House said leaders from both countries may meet next week.
Western sanctions targeting Iran's oil exports over Tehran's nuclear programme have cut Iranian crude shipments by more than half, or more than 1 million bpd, since early 2012.
"This does not mean we shall see an immediate lift to sanctions," said Andrey Kryuchenkov, analyst at VTB Capital. "However, matters are starting to look more promising."