OIL PRICES slipped yesterday after two days of gains, as Libya declared a ceasefire, easing for the moment the threat of a western air attack that could escalate the conflict and further damage oil facilities.
Oil closed out a volatile week with yet another day of sharply below-average trading activity, as dealers remained reluctant to place big bets in the face of Japan’s ongoing nuclear crisis and doubts that Muammar Gadafy’s truce would bring any swift resolution to the month-long rebellion.
Another increase in China’s rate reserve requirements, as well as ongoing unrest in countries bordering top oil exporter Saudi Arabia, further clouded the picture, keeping implied volatility levels near their highest since June.
Brent crude futures for May delivery fell 97 cents to settle at $113.93 a barrel, falling sharply from an earlier $117.29 peak after Libya’s foreign minister declared “an immediate stop to all military operations”. Despite yesterday’s price drop, Brent crude ended the week up nearly 1 per cent, after Japan’s earthquake a week ago pressured prices.
US crude futures for April delivery fell 35 cents to end at $101.07 a barrel, off their high of $103.66, but finding support above the $100-a-barrel level. US crude dipped 9 cents from the prior week.
But trading volume was below 600,000 lots for the third time this week underscoring the deep uncertainty facing the market. Traders have liquidated about 5 per cent of their positions since last Friday, when open interest in US crude reached a record 1.6 million lots. – (Reuters)
