Brent crude oil looked poised to fall below $113 and post its largest weekly loss in almost six months. The commodity traded at $113.05 at 7:45 GMT on Friday morning as concerns about a supply interruption in Iraq eased.
Iraq’s southern oilfields, which produce the majority of the nation’s exports, have remained unaffected by the ongoing conflict. That stability has taken away some of the perceived risk buoying Brent prices.
Sunni militants continued to clash with military forces in northern Iraq as the uprising makes its way toward Baghdad. Iraq’s largest refinery remains at the center of the battle as both rebels and Iraqi forces fight to control the 300,000 barrel-per-day complex.
Related Link: Brent Steady As Iraqi Exports Look Unaffected
Investors turned their attention to demand issues this week as data from the U.S. showed that the number one oil consuming nation’s recovery may not be as solid as investors thought.
A day after U.S. first quarter GDP was revised down, a consumer spending report showed only a 0.2 percent increase in May. The below-expectations figure caused many to revise their second quarter GDP estimates downward as consumer spending makes up a large chunk of the U.S.’ economic activity.
Also on investors’ minds are the ongoing negotiations over Iran’s nuclear development program.
Reuters reported that world powers met in Brussels on Thursday, seeking a permanent solution that will curb Iran’s nuclear program and lift sanctions on the nation’s oil exports for good. The current temporary arrangement is supposed to end on July 30. However, the talks have been slow moving and most expect to see the group approve a six month extension to the deadline rather than making an agreement.
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