Oil Prices Edge Lower After Hitting Five Month High

..As Iran Cautions About Marketer Fragility 

Yemisi Izuora 

Oil prices edged lower on Monday after international benchmark Brent hit a fresh five-month high in the previous session, but concerns over global supplies provided a floor to losses.

Brent crude oil futures were at $71.40 a barrel, down 15 cents, or 0.2 per cent, from their last close. Brent closed up 1 per cent on Friday when prices hit a high of $71.87 a barrel, the highest since November 12.

US West Texas Intermediate (WTI) crude futures were at $63.60 per barrel, down 29 cents, or 0.5 per cent, from their last settlement. WTI rose 0.5 per cent on Friday.

The head of Libya’s National Oil Corp warned on Friday that renewed fighting could wipe out crude production in the country.

“Supply side issues remained a concern for the market. Libyan rebel leader Khalifa Haftar moved forces closer to Tripoli,” ANZ Bank said in a research note.

The Organization of the Petroleum Exporting Countries, OPEC,  and its allies will meet in June to decide whether to continue withholding supply. OPEC,  Russia and other producers, in an alliance known as Opec+, are reducing output by 1.2 million bpd from January 1 for six months.

OPECs de facto leader, Saudi Arabia is considered keen to keep cutting, but sources within the group said it could raise output from July if disruptions continue elsewhere.

Russia’s Finance Minister Anton Siluanov was quoted by the TASS news agency as saying on Saturday that Russia and Opec may decide to boost production to fight for market share with the United States but this would push oil prices as low as $40 per barrel.

Meanwhile, Iran’s oil minister said on Sunday that the supply-demand balance in the global oil market is fragile due to U.S. pressures on Iran and Venezuela and tensions in Libya

“Venezuela is in trouble. Russia is also under sanctions. Libya is in turmoil. Part of U.S. oil production has stopped. These show the supply-demand balance is very fragile,” Bijan Zanganeh was quoted as saying by Tasnim news agency.

“If they (the Americans) decide to increase pressures on Iran, the fragility will increase in an unpredictable way,” Zanganeh added.

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