Regions

Brent crude oil slips towards $66 before long weekend

May 22
9:10 AM 2015

Oil prices slipped on Friday as worries over the impact of war in the Middle East on crude supplies were outweighed by reports of profit-taking ahead of a long weekend.

Monday, May 25 is Memorial Day in the United States and a public holiday in much of Europe, leaving many markets closed.

"No one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.

July Brent crude LCOc1 was down 45 cents at $66.09 a barrel by 1030 GMT after closing up 2.3 percent on Thursday.

U.S. crude futures are experiencing their longest winning streak since records began in 1983, helped by a drop in U.S. crude and product stockpiles last week, reflecting better demand in the world's largest oil consumer. [EIA/S]

U.S. crude for July CLc1 was down 30 cents at $60.42 a barrel, but poised to post gains for the 10th week in a row.

Data from the U.S. Energy Information Administration this week showed a big decline in U.S. oil product stockpiles, suggesting end-user demand has been strong.

"With U.S. travel expected to reach a 10-year high over Memorial Day, according to AAA (American Automobile Association), product inventory is expected to decline even further over coming weeks," ANZ analysts said in a report.

Violence in the Middle East has increased worries over the security of oil supply from the region.

A suicide bomber blew himself up at a Shi'ite mosque in eastern Saudi Arabia during Friday prayers, residents said, killing and wounding several people.

Islamic State fighters have tightened their grip on the historic Syrian city of Palmyra and have overrun Iraqi government defences east of Ramadi, the provincial capital that they seized five days earlier.

Government forces have been routed across large parts of central Iraq, the second largest oil exporter in the Organization of the Petroleum Exporting Countries.

"The headlines from the Middle East have been worrying, although the fighting probably won't affect oil supply," said Commerzbank's Fritsch.

U.S crude was also supported by expectations of lower shale oil production, said Ric Spooner, chief analyst at CMC Markets.

U.S. crude stocks in delivery hub Cushing, Oklahoma, fell by almost 740,000 barrels between Friday and Tuesday, trade sources said, citing a report by market intelligence firm Genscape.

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