This news article is originally published at MarketWatch.
Brent trades at lowest level since June 2013
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU4, +0.38% fell 94 cents, or 0.9%, to close at $96.41 a barrel. October Brent crude LCOV4, +0.24% on London’s ICE Futures exchange fell $1.93 to $101.60, its lowest finish in more than a year..
Despite Nymex and Brent gaining on Friday on reports of Ukraine destroying a Russian convoy, oil prices registered a loss for the week ended Aug. 15. On Monday, Russia’s foreign minister said an agreement was reached on delivery of what Moscow says is humanitarian aid to Ukraine, The Wall Street Journal reported.
Meanwhile, Iraqi officials said control of an important dam in northern Iraq had been wrested back from Sunni militants.
Last week, Nymex September crude lost 30 cents, while Brent crude for October lost $2.09.
Money managers such as hedge funds continued to cut their bullish bets on WTI crude in the week ended Aug. 12, according to data from the U.S. Commodity Futures Trading Commission.
“Money managers sold 19,786 contracts of WTI crude-oil futures and options in the week ended August 12. The selling is bearish, but the net exposure is down to the lowest level since April 2013,” analyst Tim Evans at Citi Futures said.
In Ukraine, government forces continue to engage pro-Russian separatists, who claimed to have shot down a Ukrainian jet, while government forces said they destroyed a Russian military convoy. In Iraq, the U.S. is supporting Kurdish forces trying to retake the strategic Mosul Dam from Islamist State fighters.
However, Barclays analysts say that soft fundamentals stemming from weak oil demand, record Saudi oil output and rebounding production in Libya are overshadowing geopolitical risks.
“We believe that the market will rebound by year-end as the supply side readjusts to a weaker demand landscape, but it is possible that Brent tests $100 before any sustained recovery occurs,” Barclays analyst Michael Cohen said in a report.
Nymex reformulated gasoline RBU4, +0.52% blendstock for September — the benchmark gasoline contract — fell 3 cents to $2.66 a gallon, the lowest close since Feb. 5, while September heating oil HOU4, +0.30% fell 4 cents to $2.81.