Oil falls below 124 dollars, tropical storm looms
Güncelleme Tarihi:
Oil fell below $124 a barrel on Monday, pressured by evidence of rising OPEC output but supported by worries about supply disruption as a tropical storm threatened facilities in the United States Gulf of Mexico.
Concerns tension over OPEC producer Iran's nuclear programme could halt exports also underpinned the market.
United States light crude was down $1.17 a barrel at $123.93 by 1455 GMT. London Brent crude dipped by $1.06 to $123.12.
Prices have recovered from a low hit last week of $120.42, the weakest since early May but remain far below the record of $147.27 struck on July 11.
They reached a session high of $126.35 early on Monday before easing after a Reuters survey showed OPEC supply rose for a third consecutive month in July mainly because of increased output from the world's top exporter Saudi Arabia.
The bearish impact was countered by Tropical Storm Edouard, which formed near a major oil and gas producing area of the northern Gulf of Mexico on Sunday, the U.S. National Hurricane Center said.
"The main factor is the storm in the U.S. Gulf, there's going to be a bit of short-covering there," said Olivier Jakob of Petromatrix.
The storm was expected to come ashore at close to hurricane strength in a few days on the Texas coast.
Oil firms, including Royal Dutch Shell and ExxonMobil, said on Sunday production was unaffected so far, but they were preparing for possible evacuations of workers and temporary output shutdowns.
Traders were also nervous supplies could be disrupted as a result of tension between the West and the world's fourth largest oil producer Iran.
The head of Iran's revolutionary guard was quoted as saying on Monday that Iran could easily close the Straits of Hormuz, a key Gulf shipping route, if it were attacked over its nuclear programme, choking off world oil supplies.
Mohammad Ali Jafari's comments followed a telephone meeting between Iran and representatives of six world powers about Tehran's nuclear programme in which the Islamic Republic said it would press ahead in spite of a demand to halt the work.
Tehran failed to meet Saturday's informal deadline to respond to a package of incentives offered by the six powers.
Oil supplies have already been disrupted from Nigeria, the world's eighth largest oil exporter, as a result of militant attacks that have cut about a fifth of its production.
Gunmen kidnapped two French expatriates near the country's oil industry hub of Port Harcourt in the restive Niger delta, military and security sources said on Sunday.