Friday, May 30, 2014

Effect of Iraq Crises on Global Benchmark

By Grant Smith
Brent crude, a global benchmark, is trading above $100 a barrel for a 23rd consecutive month, the longest stretch in data starting in 1988. Prices will average more than $100 this year and in each of the next three years, according to analyst estimates compiled by Bloomberg. It traded at $110.27 a barrel at 11:10 a.m. in London.
Iraq’s production contracted 7 percent since reaching a 35-year peak of 3.6 million barrels a day in February, according to the International Energy Agency. The Basrah Oil Terminal in southern Iraq is scheduled to load 2.5 million barrels a day of crude for export this month and 2.7 million in June, according to loading programs obtained by Bloomberg News.
Shipments from the south, the only region exporting regularly, will probably stall at about 2.5 million barrels a day, unless work on storage tanks, pumping stations and other infrastructure is completed, the Paris-based IEA said in a report May 15.
“There are still lots of uncertainties regarding deliveries,” B.K. Namdeo, refineries director at Hindustan Petroleum Corp., said in Mumbai on May 13. “If the situation continues or worsens, we may have to cut Iraqi oil imports next year and switch to countries like Iran.”

Credit: Bloomberg.net

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