Oil futures mixed, Brent rises on Iran, Libya uncertainty, WTI falls ahead of U.S. inventories data

Oil prices fluctuated on Monday with Brent rising while WTI fell and its discount to the European benchmark widened to nearly $12. Ongoing protests in Libya and the lack of a breakthrough in the latest round of talks between Iran and six world powers supported the market and mainly Brent. Expectations for an eight consecutive weekly rise in U.S. crude inventories and a report by the IEA showing the U.S. will overtake Russia as worlds top producer by 2015 pressured the market.

On the New York Mercantile Exchange, WTI crude for delivery in December traded at $95.11 per barrel at 15:23 GMT, down 0.05% on the day. Prices held in a range between day’s low of $94.32 and high of $95.22. The American benchmark rose on Monday but trimmed its weekly advance to 0.8% on Tuesday.

Meanwhile on the ICE, Brent oil for settlement in January rose by 0.72% to $106.95 a barrel by 15:23 GMT. Prices surged to a 1-1/2-week high of $107.08 a barrel, while days low stood at $105.68. The European benchmark rose by 1.2% on Monday and extended its weekly advance to over 1.7% following Tuesday’s decline.

Oil prices were pressured on expectations the industry-funded API and the EIA will report an eight consecutive weekly decline in U.S. crude oil inventories later this week. According to a weekly Bloomberg News survey of analysts, crude supplies may have risen by 500 000 barrels to 385.9 million in the week ended November 8, the highest level since the seven days to June 21. Motor gasoline inventories are projected to have fallen by 500 000 barrels, a fifth consecutive weekly decline, while distillate fuel stockpiles probably dropped by 900 000 barrels, the poll showed.

U.S. crude inventories have soared recently as refineries were idled for maintenance works prior to the winter season. Expectations for a pick up in refinery utilization however limited losses as investors expected supplies to be drained in the upcoming weeks.

The American benchmark was also pressured after the International Energy Agency said the U.S. will overtake Russia as worlds top producer by 2015 and be close to energy self-sufficiency in the next twenty years amid increased output from shale formations. The upward trend however is expected to plateau after 2020 and the U.S. will lose its top ranking in the beginning of the 2030s. The role of OPEC is expected to recover by the time U.S. shale oil production begins to lose momentum in the middle of the next decade. U.S. crude production jumped to 7.896 million bpd in the week ended October 18, the highest level since 1989, EIA data showed.

“The United States moves steadily towards meeting all of its energy needs from domestic resources by 2035,” the IEA said in its report. “But this does not mean that the world is on the cusp of a new era of oil abundance. Light, tight oil shakes the next 10 years, but leaves the longer term unstirred.”

Iran talks, Libya protests

Brent drew support after Iranian diplomats and their counterparts from the U.S., U.K., France, Russia, China and Germany failed to reach an agreement on the nation’s disputed nuclear program in Geneva, which gave oil prices a boost this week. The support however is expected to be short-lived as negotiations are scheduled to resume on November 20. U.S. Secretary of State John Kerry said he hoped for an agreement over Iran’s nuclear program within months.

Also fanning negative sentiment, Iran said on Monday it will grant U.N. inspectors “managed access” for inspections on some key points of its nuclear program as a sign it is willing to grant concessions. The International Atomic Energy Agency was permitted access to inspect Iran’s largest uranium mine and a heavy-water plant.

Olivier Jakob, an oil analyst at Petromatrix in Zug, Switzerland, said for CNBC: “There were confusing signals coming from the Iran talks at the end of last week, and its continuing to add volatility to oil markets.”

Meanwhile, ongoing protests and tension in Libya continued to fuel concerns over global supplies. Libyan gas exports to Italy were halted on Monday by demonstrators. A day earlier, an autonomy movement said it had formed a regional oil company to start selling oil.