Oil Markets Look Beyond Foiled Turkey Coup
EghtesadOnline: Oil prices fell on Monday as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals, while disruptions to crude exports in Libya lent prices some support.
Brent crude futures fell 36 cents to $47.25 a barrel on Monday, while US crude futures were 31 cents lower at $45.64 a barrel, Reuters reported.
“The market is looking past the coup,” CMC Markets’ chief market analyst in Sydney Ric Spooner said.
Istanbul’s Bosphorus Strait, a chokepoint for oil that handles about 3% of global shipments, mainly from Black Sea ports and the Caspian region, reopened on Saturday after closing for several hours after Friday’s failed coup.
News that oil guards protesting over pay shut Libya’s Hariga oil terminal on Sunday also dampened hopes the country could boost its output significantly any time soon, reports Financial Tribune.
“Libya remains a wild card in the global oil market balance,” SEB chief commodities analyst Bjarne Schieldrop said. “An immediate revival in Libyan crude exports looks less daunting and might help to support crude prices slightly.”
Saudi Arabia’s energy minister said on Sunday the kingdom always reacts to oil market supply and demand and would continue to monitor crude markets for any developments.
A report by Morgan Stanley raised concerns about the longer-term outlook for oil consumption as demand for petrochemicals rather than fuels such as diesel and gasoline is clouding the outlook for crude demand. “Fundamental headwinds are growing, supply-demand rebalancing is likely still a mid-2017 event, but tail risks are admittedly large in both directions, as geopolitics add to uncertainty,” the report said.
“A rapid rise of non-petroleum products is boosting total product demand, but this is unhelpful for crude oil. Based on the latest data, even our tepid 800,000 barrels per day growth estimate for global crude runs looks too high.”