Brent oil futures rebounded above $105 a barrel

Brent crude was up 32 cents at $105.27 a barrel at 1000 GMT on Friday, on track to end the week marginally higher

London: Brent oil futures rebounded above $105 (Dh386) a barrel on concern over the war in Syria and continuing weakness for the dollar.

Though Syria is not key to global oil supply, investors are worried that escalation in the civil war could drag in other countries and plunge the whole oil-producing region into conflict.
“Crude oil has been trading in a range for more than a month … With the escalation in Syria, the buying on the dips is probably going to be stronger as the geopolitical premium needs to be increased,” Petromatrix analyst Olivier Jakob said.
Brent crude was up 32 cents at $105.27 a barrel at 10am GMT on Friday, on track to end the week marginally higher.

The contract has rebounded from a weekly low of $101.82 on Tuesday, partly driven by a weaker dollar.
US oil was 27 cents higher at $96.95 a barrel, trading at the highest level in nearly a month, and was also set to rise slightly on the week.

President Barack Obama authorised the shipment of US weapons to Syrian rebels for the first time after the White House said it had proof that the Syrian government used chemical weapons against rebels.
“We’re seeing the Syrian situation worsen … all the foreign backers are upping their stakes in Syria and none of them can really be sure what the consequences will be,” Richard Mallinson, a consultant at Energy Aspects, said.
IRAN SANCTIONS

In other geopolitical news, millions of Iranians voted to choose between six candidates to replace incumbent president Mahmoud Ahmadinejad, but none is seen as challenging the Islamic Republic’s 34-year-old system of clerical rule.
Analysts say the outcome is unlikely to have any short-term impact on oil because any improvement in relations with the West over Iran’s nuclear programme will take time to translate into a change in policy.
“Sanctions on oil are probably going to be among the last [issue] to be addressed, because they are the biggest lever the West has,” Mallinson said.
Oil has risen this week in spite of forecasts of “sluggish” demand growth by industry bodies such as the International Energy Agency.

“The key driver of oil has been the weakness in the dollar rather than any fundamental factors,” said Ric Spooner, chief market analyst at CMC Markets.
The dollar remained in the doldrums on Friday after hitting a four-month low against a basket of currencies in early trade.

A weaker dollar supports oil by making it cheaper for holders of other currencies.
– Reuters

Source:GulfNews

Sudan to shut South Sudan oil flow

Khartoum: Sudan on Sunday prepared to stop the oil flow from South Sudan on the orders of President Omar Al Bashir but an expert said the process could take weeks.

Bashir said petroleum companies working in South Sudan will be informed about “shutting down the pipeline” from Sunday, the official SUNA news agency reported.

The order came after Sudan’s leader warned the South over backing rebels, who analysts say humiliated the authorities with recent attacks.

South Sudan’s government in Juba denies supporting insurgents in the north.

I think if you do it properly it would take 45 days,” to stop the oil without causing damage, said the independent expert who asked not to be further identified.
“It’s not like opening and closing a water tap.”

At a press conference scheduled for 1100 GMT Sudan’s Information Minister Ahmad Bilal Osman was expected to comment further on relations with South Sudan.

This will be the second closure of South Sudan’s oil wells and the Sudanese pipeline system in about 18 months.
Production had only resumed in early April after the two countries agreed on detailed timetables to normalise relations, after intermittent border clashes, by implementing the oil deal and eight other security and economic pacts.
In early 2012 the South stopped its crude production after accusing Khartoum of theft in a dispute over export fees.
The previous shutdown “went very well”, the expert said, adding Sudan’s oil ministry has enough experience to safely close the system and its pipeline running 1,500 kilometres to the Port Sudan terminal.

Thousands of wells on the South Sudanese side will need to be shut one by one and the pipeline flushed, he said.
“You need to evacuate the oil somewhere,” the expert said.

“If they do not do that properly the oil will gel. It’s not easy to reverse it to liquid again.”
The expert was not sure what point the oil had reached in the pipeline but said “it should be close to Port Sudan”.
Bashir warned on May 27 that he would block the oil if the South’s government provides assistance to rebels fighting in South Kordofan and Blue Nile states, or in the Darfur region.

Khartoum has long accused South Sudan of supporting rebels in the north, a complaint which for months held up implementation of the oil and security pacts.
Bashir’s late-May threat came at a ceremony following the army’s recapture of Abu Kershola in the far north of South Kordofan.
Rebels held Abu Kershola and its garrison for a month after seizing it during a coordinated attack on several areas including the strategic and previously peaceful town of Umm Rawaba in North Kordofan.
Analysts called the initial attack a humiliation for the authorities.

More recently there were very strong rumours that the “liberation” of Abu Kershola only resulted from a withdrawal by rebels of the Sudan Revolutionary Front coalition, one Sudan analyst told AFP.
“The problem is that nobody has seen any evidence” of continued South Sudanese support to the insurgents, the analyst said.

“They (Sudan) have their own internal difficulties and they want to use South Sudan as a scapegoat,” South Sudanese Information Minister Barnaba Marial Benjamin told AFP .
South Sudan split from Sudan in July 2011 in the wake of a referendum vote for independence under a peace deal that ended a 22-year civil war.

Independence left key issues unresolved, including how much the landlocked South should pay for shipping its oil through Sudan’s export infrastructure.

In a March report the Small Arms Survey, a Swiss-based independent research project, said it found no evidence of weapons supplies from Juba to the Sudan People’s Liberation Movement-North (SPLM-N) after the South’s independence.
“There are, however, some reports that both SPLM-N and JEM are benefiting from other kinds of assistance,” including logistics, fuel and food, the report said.

SPLM-N has been fighting for two years in South Kordofan and Blue Nile states.

Analysts say they have been assisted by JEM, the Justice and Equality Movement of Darfur.

Source: Gulf News