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02 March 2024

Oil falls towards $95 as supply worries ease

By Agencies

Oil slipped towards $95 (Dh346.75) a barrel on Friday as worries about supply from Venezuela and Mexico eased, but was still near a one-month high after rising by more than 2 per cent overnight.


US crude shed 32 cents to $95.14 (Dh347.26) a barrel by 0154 GMT, following a rise of $2.19 (Dh7.99) in New York on Thursday.


Venezuela, one of the largest crude exporters to the United States, had minimised compensation it owes Exxon Mobil for the company's stake in an oil project, part of an escalating legal battle between the two that seen Venezuela cut off supply to Exxon.


US Energy Secretary Sam Bodman said on Thursday he did not expect Exxon Mobil to have trouble replacing Venezuelan oil, but added the nation's Strategic Petroleum Reserve would be available if needed.


"Venezuela will not affect the crude supply fundamentally. There will be some risk premium but there will not be any natural shortfall in crude," said Gerard Burg of National Australia Bank in Sydney.


Major oil producers in the Middle East have already assured the United States they could compensate for a supply disruption if Venezuela slows exports.


Supply worries also eased as Mexico re-opened all three of its main oil exporting ports on Thursday, a day after they were closed because of bad weather in the Gulf of Mexico.


The market continued to fret over slowing US oil demand as economic woes lingered.


Stocks, bonds and the US dollar all weakened on Thursday after US Federal Reserve Chairman Ben Bernanke painted a gloomy picture of a U.S. economy facing risks of both slow growth and inflation.


FGIC, the fourth-largest US bond insurer, became the first major bond insurer to lose the top rating from all three major credit rating agencies, raising the possibility of more asset writedowns by banks and funds holding securities.


Former US Federal Reserve Chairman Alan Greenspan on Thursday said the US economy is "clearly on the edge" of a recession, and is being burdened by high oil prices. (Reuters)