Brent Crude, Natural Gas Take Drastic Falls

 | Jul 09, 2014 05:28AM ET

Brent crude slid more than $1 per barrel yesterday, its seventh straight decline, hitting a one-month low below $109 as Libyan oil exports looked likely to rise and fears eased of supply disruption in Iraq. Brent oil is trading at 108.92 down a penny this morning while WTI crude oil gained 14 cents to trade at 103.55. With tensions and supply disruptions avoided in Iraq and Libya coming back on line there is no justification for crude oil prices to remain above the $100 price level as speculators continue to try to hold up prices.

Oil continued its price decline for the second consecutive session, as Libyan oil exports looked likely to rise and fears eased of supply disruption in Iraq. Libya’s 340,000 barrel per day (bpd) El Sharara oilfield has resumed operations after a four-month strike and this may free more oil for export after last week’s port deal with rebels. In Libya, preparations were under way to reopen two major oil ports in the east. Shut by protests almost a year ago, the Ras Lanuf and Es Sider ports make up more than a third of the OPEC producer’s export capacity.

Brent prices shot higher on June 12, when insurgents from the Islamic State began taking towns across the north of Iraq and raised fears of a disruption to Iraq’s nearly 3 million barrels a day of crude exports. This pushed the price to more than $115 a barrel in mid-June, but those worries quickly disappeared as the violence failed to spread south to Iraq’s oil producing regions. The violence in Iraq hasn’t spread to the south, the source of most of the country’s oil output, and dragged down crude prices. Iraq is the second-largest producer of the Organization of Petroleum Exporting Countries (OPEC).