Brent slips on Greece woes; stays above $118 on supply fears

Wed Feb 15, 2012 11:39pm EST
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By Jessica Jaganathan

SINGAPORE (Reuters) - Brent crude prices slipped on Thursday on fears of a delay in a second bailout package for debt-ridden Greece, although worries of supply disruption from Iran and U.S. data showing an unexpected drop in inventories limited the drop.

Prices rose to a six-month high in the previous session on supply worries as Iran declared progress on its nuclear capabilities, including ability to enrich uranium faster, triggering concerns of rising tension with the West.

Brent crude retreated by 36 cents to $118.57 a barrel by 0400 GMT, after settling at $118.93 on Wednesday. U.S. crude slipped 29 cents to hold at $101.51, while the premium of the European benchmark over U.S. crude remained below $17.

"The volatility in risk assets, concerns of supply in the Middle East, and drawdown of U.S. crude inventories are all putting a floor on oil prices," Ben Le Brun, market analyst at OptionsXpress. "Tensions in Iran will always be supportive of oil prices regardless of growth concerns."

Iran's President Mahmoud Ahmadinejad comments on Wednesday showed Tehran's resolve to pursue a nuclear program, without any signs of wavering despite tighter Western sanctions.


Additional support for oil prices came from the U.S., after latest data showed a surprising drop of 171,000 barrels in the week to February 10 in crude oil stockpiles last week, against a forecast for a 1.5 million-barrel increase.

Crude stocks held at the Cushing, Oklahoma, delivery hub for U.S.-traded crude oil futures rose to their highest level since September, posting a 2 million-barrel build, the biggest weekly increase since December 2009.   Continued...

A view of a drilling rig and distant production platform in the Soldado Field off Trinidad's southwest coast, September 10, 2011. REUTERS/Andrea De Silva