Oil fluctuates on ample supply outlook, Syria uncertainty

Both WTI and Brent benchmarks swung between gains and losses on Thursday as market players weighed OPECs ample global supply outlook against uncertainty over a peaceful resolution of the Syrian conflict.

On the New York Mercantile Exchange, WTI crude for October delivery traded at $107.48 per barrel at 6:56 GMT, down 0.08% on the day. Prices ranged between days high and low of $107.93 and $107.51 a barrel respectively. Futures rose 0.4% yesterday, capping two days of losses, and trimmed their weekly decline to 2.5%.

Meanwhile on the ICE, Brent crude for delivery in November rose by 0.01% to $110.21 a barrel at 6:57 GMT. Prices held in a narrow range between days high and low of $110.42 and $110.13 a barrel respectively. The European benchmark rose by 0.1% on Wednesday, the first advance in three days, but is still marking a 4.9% decline on weekly basis.

Oil prices were supported amid uncertainty over the resolution of the Syrian conflict. U.S. Secretary of State John Kerry is scheduled to meet with his Russian colleague Sergei Lavrov in Geneva to discuss Russias plan to put Syrias chemical arsenal under international control. On Tuesday, Foreign Minister Walid al-Muallem said during a trip to Moscow that Syria accepted Russia’s proposal for granting international control over its chemical weapons as a way for peacefully resolving the conflict with the U.S. and averting military intervention.

President Barack Obama asked Congress in a televised address to the nation later on Tuesday to delay voting for authorization of military action against Syria, seeking a diplomatic resolution to the problem. “It’s too early to tell whether this offer will succeed, and any agreement must verify that the Assad regime keeps its commitments,” Obama said. “The initiative has the potential to remove the threat of chemical weapons without the use of force, particularly because Russia is one of Assad’s strongest allies.”

Oil supplies

Prices were pressured as OPEC’s Secretary-General Abdalla El-Badri said the oil market is well-supplied. He said there is no need for action even as Libyas output has fallen to a tenth of its capacity. Ali Al-Naimi, Saudi Arabia’s oil minister, said that his country will meet additional demand as geopolitical turmoil dominates the market. Saudi Arabia is the groups biggest producer.

Meanwhile, Libyas Prime Minister Ali Zeidan said on Wednesday that the countrys attorney general has issued arrest warrants for the leaders of the protesting groups and added he would act soon against the strikes.

In its weekly report on Wednesday, the Energy Information Administration said U.S. crude reserve fell less than expected but refineries operated at a record rate. The agency reported that U.S. crude oil inventories fell by 219 000 barrels to 360 million during the week ended September 6. Analysts surveyed by Bloomberg expected a 2.1 million barrels drop. Stockpiles at Cushing, Oklahoma, the delivery point for New York-traded contracts and biggest U.S. storage hub, fell by 639 000 barrels to 34.1 million, a tenth consecutive decline.

Refineries utilization rose by 0.8% to 92.5%, the highest since 2006. Both gasoline and distillate fuel production remained unchanged last week and averaged 9.1 million and 5.0 million barrels per day, respectively.

The EIA also reported that U.S. motor gasoline inventories rose by 1.7 million barrels to 217.6 million, confounding analysts’ projections for a 1 million barrels drop, and remained in the upper limit of the average range for this time of the year. At the same time, distillate fuel supplies rose by 2.6 million barrels last week to 132.2 million, underperforming projections for a 600 000 barrels increase, but remained near the lower limit of the average range. Total products supplied over the last four weeks rose by 1.7% from a year earlier and averaged 19.0 million barrels per day.