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UPDATE 2-Brent dips towards $111 but supply woes limit losses

Friday, 27 Dec 2013 | 5:01 AM ET

* Libya, South Sudan supply disruptions support oil

* Strike ends at France's La Mede refinery, one plant still out

* Coming up: EIA weekly oil data; 1600 GMT

(Updates previous SINGAPORE)

LONDON, Dec 27 (Reuters) - Brent crude oil slipped towards $111 a barrel on Friday although supply disruptions in Africa kept losses in check.

Escalating violence in South Sudan threatened to reduce the country's crude output further, adding to supply outages from Libya.

U.S. gasoline futures eased from a three-month high after workers at France's La Mede refinery lifted a two-week-old strike over pay - leaving only one refinery still striking.

Brent crude slipped 21 cents to $111.77 a barrel by 0940 GMT after settling at $111.98 on Thursday, the highest since Dec. 3.

U.S. crude rose 1 cent to $99.56 a barrel, having hit a more than two-month top of $99.77 earlier.

"The market is vulnerable to profit-taking, which could pressure prices on the downside," said Masaki Suematsu of brokerage Newedge Japan.

Traders are now awaiting a report from the U.S. Energy Information Administration (EIA) to gauge supply and demand in the world's top oil-consuming country.

Crude stockpiles are expected to have fallen for a fourth straight week while gasoline inventories could have risen, analysts said in a Reuters poll.

But data from industry group the American Petroleum Institute showed that crude stocks unexpectedly rose by 716,000 barrels last week, while gasoline inventories slumped and distillate stocks dropped.

A fall in U.S. jobless claims and stronger retail sales reinforced a more robust outlook for the world's largest economy next year.

But some analysts do not expect this to translate into stronger fuel demand due to the use of more fuel-efficient vehicles and abundant natural gas.

"A healthy economy is not linked to fuel demand," Suematsu said, adding that rising automobile fuel efficiency has squeezed gasoline consumption. "Natural gas is cheap so heating oil demand is unlikely to rise further."

(Additional reporting by Florence Tan in Singapore; Editing by Dale Hudson)