Oil slips as market eyes developments in Iraq, latest reading on U.S. supplies

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The price of oil fell Tuesday as fears over the prospect of disruption to Iraq’s crude supplies subsided a little and traders awaited the latest report on U.S. supplies.

Benchmark West Texas Intermediate crude for July delivery dropped 54 cents to US$106.36 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark used to price international oils, gained 51 cents to US$113.45 a barrel on the ICE Futures exchange in London.

Up to 275 U.S. soldiers moving into position to protect the U.S. Embassy and other American interests in Iraq as President Barack Obama weighs options for dealing with the al-Qaida inspired militants who have captured a vast swath of the country’s north.

Iraq’s crude oil exports have so far not been disrupted but the conflict raises concern about whether the country can rebuild its oil infrastructure and meet global demand.

The International Energy Agency, which acts as a consultancy to developed economies, said its members’ oil reserves were at a “comfortable level” and that the agency was ready to respond quickly to any supply disruptions caused by the turmoil in Iraq.

“At this moment, not a single barrel of oil has been displaced compared to a week ago,” IEA Executive Director Maria van der Hoeven said after the release of the agency’s medium-term oil market report.

On Wednesday, the market gets the latest reading on U.S. supplies. Analysts expect oil supplies to have fallen 1.4 million barrels in the week ended June 13, according to a survey by Platts.

In other energy futures trading on the Nymex, wholesale gasoline added two cents to US$3.09 a U.S. gallon (3.79 litres), heating oil rose two cents to US$3.02 a gallon and natural gas was flat at US$4.71 per 1,000 cubic feet.

(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS), (TSX:CVE)

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