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Crude oil futures - weekly outlook: July 7 - 11

Published 07/06/2014, 07:39 AM
Updated 07/06/2014, 07:39 AM
Crude oil futures end the week lower as Iraq, Libya concerns ease

Investing.com - Crude oil futures ended Friday’s session at one-month lows, as worries over potential supply disruptions in the Middle East continued to subside.

On the New York Mercantile Exchange, crude oil for delivery in August slumped to a session low of $103.64 a barrel on Friday, the weakest since June 12, before trimming losses to end the week at $103.77, down 0.28%, or 29 cents.

Trading volumes were thin on Friday, as U.S. markets remained closed for the Fourth of July holiday.

Oil futures were likely to find support at $103.12 a barrel, the low from June 10 and resistance at $105.53 a barrel, the high from July 2.

For the week, Nymex oil futures tumbled 1.86%, or $1.97 a barrel, the second consecutive weekly loss.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery hit $110.56 a barrel on Friday, the lowest since June 12, before settling at $110.64, down 0.32%, or 36 cents.

The August Brent contract lost 2.34%, or $2.66 a barrel, on the week, the biggest weekly decline in six months.

Meanwhile the spread between the Brent and the WTI crude contracts stood at $6.87 a barrel by close of trade on Friday, compared to $7.56 in the preceding week.

Investors continued to unwind positions that had priced in the possibility of major supply disruptions stemming from violence in Libya and Iraq.

Libyan rebels agreed to open two of its ports for oil exports earlier in the week. The two terminals have a capacity to export up to 560,000 barrels of oil a day.

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Meanwhile, indications that Iraqi oil exports from the southern part of the country remained insulated from the sectarian violence that has swept the north in recent weeks also weighed.

Futures rallied to nine-month highs amid fears that an insurgency in northern Iraq would spread to the oil-rich south and disrupt the nation's oil production.

Iraq produced approximately 3 million barrels a day of oil last month, making it OPEC’s second-biggest oil producer behind Saudi Arabia.

Upbeat U.S. jobs data released on Thursday failed to boost prices. The U.S. Department of Labor said non-farm payrolls rose by a seasonally adjusted 288,000 in June, easily surpassing expectations for an increase of 212,000.

The unemployment rate ticked down to a five-and-a-half year low of 6.1% from 6.3% in May. Analysts had expected the jobless rate to hold steady at 6.3% last month.

In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in New York-traded oil futures in the week ending July 1.

Net longs totaled 330,148 contracts as of last week, down 4.4% from net longs of 345,283 in the preceding week.

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