Oil futures fell Monday as Libya resumed crude exports from a previously closed terminal, though traders continued to monitor the conflict in Syria for word of a potential military response by the U.S. and other Western nations.
Oil futures fell Monday as
Libya
resumed crude exports from a previously closed terminal, though traders
continued to monitor the conflict in
Syria
for
word of a potential military response by the
U.S.
and
other Western nations.
Light, sweet crude for October delivery settled down 50 cents, or 0.5%, at
$105.92 a barrel on the New York Mercantile Exchange. The decline was the first
in three trading sessions for Nymex crude. Violence in the
Middle
East
has helped support oil prices in recent days, sparking concerns about
whether such tensions could lead to supply disruptions.
Brent crude on the ICE futures exchange declined 31 cents, or 0.3%, to $110.73
a barrel, though volume was light due to a U.K. bank holiday.
Futures traded lower early Monday after Libyan deputy oil minister Omar Shakmak
told Dow Jones Newswires that exports from the
port
of
Marsa
al Brega
would resume.
Protests had caused the terminal and others to be closed since the end of July.
Brega, which has capacity around 90,000 barrels a day, was one of four ports
that were affected by the export shutdown.
"The ability to export again out of
Libya
has been
bearish [for the oil market]," said Andy Lebow, senior vice president of
energy futures at Jefferies Bache LLC in
New
York
.
Market participants were also focused on the increasing tension in
Syria
amid
speculation that
U.S.
is
weighing a potential military strike against the regime of President Bashar
al-Assad. The Syrian government reportedly used chemical weapons against
civilians last week, killing more than 1,000 people.
In an address earlier Monday, U.S. Secretary of State John Kerry said President
Barack Obama thinks there must be accountability for the chemical weapons use.
Syria
's
proximity to other large Middle Eastern oil producers has raised worries about
the crude supply and, in turn, boosted prices.
In a note to clients, Barclays analyst Helima Croft said that "no supplies
are at immediate risk," but added that the bigger risk for the oil market
is the "potential for the Syrian conflict to spread to neighboring
countries and imperil regional output."
The situation, combined with a recent increase in unplanned oil refinery
outages and a possible uptick in demand, could "support even higher price
levels," in the future, she said.
Meanwhile, in economic data pressuring oil futures Monday, the U.S. Commerce
Department said orders for long-lasting manufactured goods dropped more than
expected. Total orders for durable goods, big-ticket items built to last three
years or more, fell 7.3% in July from the prior month, compared with forecasts
for a 4% drop.
Mr. Lebow said the oil market "did not like the durable goods
number," noting that traders now believe it's just a matter of time until
the Federal Reserve will begin to unwind its $85 billion-a-month bond buying
program.
Front-month September reformulated gasoline blendstock, or RBOB, settled down
5.55 cents, or 1.9%, at $2.9517 a gallon. September heating oil settled down
1.6 cents, or 0.5%, at $3.0790 a gallon.
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