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Brent hovers under $61, WTI down as euro slips vs dollar

An oil well pump jack is seen at an oil field supply yard near Denver, Colorado February 2, 2015. REUTERS/Rick Wilking

By Himanshu Ojha

LONDON (Reuters) - Brent crude futures pared early gains on Thursday to hover just under $61 as the euro slipped to an 11-year low against the dollar, offsetting concerns about tensions in Iraq and Libya.

The euro fell against the dollar, making commodities priced in greenback more expensive for holders of other currencies, after European Central Bank chief Mario Draghi left the door open for asset purchases beyond September 2016.

Brent crude front-month futures were trading 34 cents higher at $60.89 a barrel by 9.38 a.m. ET while West Texas Intermediate (WTI) crude (CLc1) fell 38 cents to $51.15.

Brent (LCOc1) has traded around $60 since mid-February, rebounding from a six-year low of about $45 hit in January.

Brent and WTI rose earlier on Thursday due to concerns about oil supplies from Libya and Iraq. A deteriorating security situation led Libya's state oil company to declare force majeure on 11 of its oilfields on Wednesday.

Output from Libya was at more than 400,000 barrels per day on March 1, higher than in January but well below the 1.6 million bpd levels seen before the country's 2011 civil war.

In Iraq, Islamic State militants set fire to oil wells in the Ajil field east of Tikrit to try to hinder aerial attacks aimed at driving them from the oilfield, a witness and military source said.

"The market does seem to be paying a little bit of attention to geopolitical factors, namely Iraq and Libya," said Virendra Chauhan, oil analyst at Energy Aspects.

Government data showed commercial crude stockpiles in the United States hit a record high last week, rising twice as much as expected to 10.3 million barrels, but that failed to keep prices down.

In the United States, jobless claims unexpectedly rose to 320,000 for the week ended Feb. 28.

Tehran's ambassador to the International Atomic Energy Agency (IAEA) said on Wednesday no deal had been reached on the duration of any possible final agreement with world powers on Iran's program. That allayed investors' fears of an imminent rise in Iranian oil supply.


"The rate of stock build has accelerated week by week throughout February and with upcoming refinery maintenance likely to weaken demand for crude, it is possible that this will continue in March," BNP Paribas analysts said in a note.


(Additional reporting by Florence Tan in Singapore; editing by David Clarke)