Oil prices dip as low demand outweighs political tensions

Brent and US crude futures tumbled to the lowest settlement prices in months, as oversupply in the Atlantic basin and low demand outweighed worries over political tensions in the Middle East, North Africa and Ukraine. Putting additional pressure on the market, an outage at the 115,000-barrel-per day Coffeyville, Kansas, refinery, a major crude consumer, could last up to four weeks.

Oil prices ended the week down more than 3 percent, as forecasts for a supply glut in West African and European markets dragged Brent below $105 a barrel and US crude below $98. Brent crude slid $1.18 to settle at $104.84 a barrel, its lowest settlement since 2 April. US crude fell 29 cents to settle at $97.88 a barrel, the lowest settlement since 6 February. 

Meanwhile, worries over geopolitical risks to oil supply have eased despite escalating violence in parts of the Middle East and North Africa.

Opec’s second largest producer, Iraq, is battling an Islamic insurgency in the north and west. The conflict threatens to split the country, but has yet to have an impact on near-record oil exports from the south.

Baghdad is also embroiled in a dispute with Iraqi Kurdistan over oil exports via Turkey.

In Libya, oil output remains steady around 500,000 bpd, down from 1 million bpd in 2012, following weeks of clashes between rival militias.