Brent crude oil retreated on Wednesday, shaking off supply worries because of geopolitical tension and falling under pressure from an oversupplied market.
The commodity traded at $107.21 at 8:40 GMT on Wednesday morning as investors awaited U.S. inventory data due out later in the day.
Russia, the world’s largest oil supplier, has been under the microscope as accusations were made that Moscow was to blame for the downed Malaysian Airlines passenger plane last week.
On Tuesday, the European Union threatened further sanctions against Moscow, but has yet to take action.
CNBC reported that French officials have confirmed that the nation will move forward with a planned delivery of a warship to Moscow this week, something both the U.S. and the U.K. have been protesting.
Instability in Libya is also on the radar, as the nation’s government is still struggling with rebel groups. This week two suicide bombers took out an army base in Benghazi, highlighting the government’s lack of control over the deteriorating situation.
Libyan oil exports dropped to 450,000 barrels per day on Monday, down from 555,000 bpd on Thursday. Despite that, Libya’s National Oil Company is optimistic about the planned reopening of its Brega oil port, which would increase the region’s production.
Moving forward, investors will be anticipating the Energy Information Administration’s oil inventory report, due out later in the day. Analysts are expecting the data to show that U.S. crude inventories fell 2.8 million barrels last week.
On Tuesday, the American Petroleum Institute’s version of the same report showed that U.S. crude stocks were down 555,000 barrels last week.
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