Home / Business / Brent oil falls to $82/bbl, reaches four-year low

Brent oil falls to $82/bbl, reaches four-year low

LONDON, Nov 11 – Brent crude fell to $82 per barrel on Tuesday as a firm dollar and robust production from U.S. shale fields outweighed a drop in Libyan output, although it recovered in part from a four-year low early in the day.

The U.S. dollar rose against a basket of currencies and hit a seven-year high against the yen, suppressing demand for oil and other dollar-priced commodities by making them more expensive in other currencies.

But a supply shock in Libya supported prices as a rival government that has seized the capital took control of its most productive oilfield, El Sharara.

El Sharara and the eastern oil port of Hariga, which was shut by protests on Saturday, remained closed on Tuesday, bringing Libya’s output sharply down from a peak of over 900,000 barrels a day achieved in September.

“Libya is likely to see a reversal of its recovery in oil output as the civil war deepens,” analysts at Eurasia Group said in a note.

Brent for December was down 34 cents at $82 per barrel at 1415 GMT after reaching $81.23, its lowest since October 2010. U.S. crude was down 10 cents at $77.30 per barrel.

The Brent benchmark has fallen nearly 30 percent since late June due to rising production, slowing global demand and no signal from the Organization of the Petroleum Exporting Countries that it will cut output at a Nov. 27 meeting.

Falling prices have had little impact on drilling in the United States, with output from the fastest-growing and largest shale fields showing no sign of slowing, the Energy Information Administration said.

There was no breakthrough in negotiations between Iran and Western powers to resolve the dispute over Iran’s nuclear ambitions after talks in Muscat, officials said, but talks continued on Tuesday. A deal could result in the lifting of Western sanctions, paving the way for increased Iranian oil exports.

But Iran has repeatedly refused to let a United Nations atomic energy official into the country, diplomats said, indicating continued mistrust between the two sides.

JPMorgan slashed its 2015 Brent price forecast by $33 to $82 per barrel on Monday, citing supply pressures in the Atlantic Basin and the apparent inability of OPEC member states to work cohesively to restrain production.

In related news, County holds off on fracking due to low oil prices.

 

(Additional reporting By Jacob Gronholt-Pedersen in Singapore; editing by Dale Hudson and Jane Baird)

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