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02 March 2024

Oil slips from record over $100

By Agencies


Oil slipped on Wednesday after surging nearly 5 per cent to a record above $100 a barrel a day ago amid an influx of fresh investor capital into the commodities sector and concerns that Opec will not hike output next month.
US crude slid 61 cents to $99.40 a barrel by 0142 GMT after investors paused for thought following Tuesday's $4.51 a barrel surge. The contract reached a new peak of $100.10 a day ago, one
cent beyond its previous January 3 high.

London Brent crude fell 68 cents to $97.88 a barrel.

"It's just a bit of a correction. The market is settling down after such a massive move last night," said Peter McGuire, managing director of Commodity Warrants Australia.

Oil prices hit the triple digits on Tuesday after Opec sources said a decision to cut oil output when the cartel meets on March 5 was unlikely, with prices rising to records and uncertainty about supply from Venezuela and Nigeria.

News that Nigerian oil delta rebel leader Henry Okah had died -- later debunked by a government spokesman -- a rush of speculative investment in oil and other commodities, as well as US refinery problems and the ongoing row between Venezuela and Exxon Mobil helped lift prices.

The gains came in tandem with fresh record highs for platinum and soybeans as the commodities complex remained in favor among investors seeking shelter from range-bound share markets.

"The rally may be less indicative of narrowly defined energy fundamentals than of fund capital's quest for safe havens and financial hedges against inflation," said Antoine Halff, deputy head of research at brokers Newedge.

While supply concerns have unnerved traders, US supplies still appear healthy, with crude oil stocks expected to have risen for a sixth-straight time last week as imports increased and refinery utilisation held steady.

Crude stocks were expected to rise by 2.3 million barrels, while distillate inventories were seen falling by 2 million barrels and gasoline stocks building by 600,000 barrels, according to a preliminary Reuters poll ahead of data due on Thursday, a day later than usual due to Monday's public holiday.

"There could be a march northwards from here on, but we'll have to watch the next few days and see where prices settle," McGuire said. (Reuters)