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Brent Sinks Below $110 On Oversupply

Published 12/10/2013, 10:36 AM
Updated 07/09/2023, 06:31 AM
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Brent crude oil slid back below $110 on Monday as a well supplied global market, coupled with sinking demand in Europe, weighed on the commodity.

Brent traded at $109.83 at 5:15 GMT on Tuesday morning as investors considered Federal Reserve board members' comments in their search for more clues about the bank's taper time line.

Although most are expecting the Fed to continue with its $85 billion per month stimulus plan until March, better than expected jobs data last week has caused some to look more carefully at the possibility of a January, or even a December, taper.

Although no clear signals about the bank's direction have been given, some of the bank's board members, like St. Louis Fed President James Bullard, have been vocal about their support of a taper sooner rather than later.

Brent was also under pressure from a lack of demand in an oversupplied market. CNBC reported that demand from European refineries has dropped off at a time when OPEC members have refused to cut down on supply. Data showed that Saudi Arabia maintained its production levels from October to November while Iran and Iraq have said they will not cut their output in 2014 even if demand is weak.

The commodity did find some support from strong data from China which showed that exports from the world's second largest economy came in well above forecasts in November. Crude imports also higher, up 19.1 percent from October's figure.

Weather also contributed a lift to Brent prices as several North Sea oil producers were forced to move staff from some of their platforms due to a massive storm. The extreme weather, which some meteorologists say could be the worst weather Europe has seen in years, cut down on production.


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