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MARKET IGNORES CHINA DATA

Oil plunges below $97 over ample supply

SINGAPORE, September 24, 2014

Brent crude extended losses for a third day on Wednesday, slipping further away from $97 a barrel, as inflated supplies and weak economic data outweighed rising geopolitical tensions in the Middle East.

Downbeat European economic data and a rise in oil exports from Iraq and Nigeria overshadowed a boost to the mood from China after the release of a better-than-expected flash Purchasing Managers' Index (PMI) for September on Tuesday. US airstrikes on militants in Syria failed to lift oil prices.

Brent for November delivery fell 31 cents to $96.54 a barrel by 0312 GMT. US crude slipped 1 cent to $91.55 a barrel.

"Oil prices did not really gather the support coming from China's manufacturing data from yesterday as softer European manufacturing data followed," said Ben Le Brun, market analyst at OptionsXpress in Sydney.

The European Central Bank faces an uphill task to spur growth as euro zone business activity has expanded at a slightly weaker pace than expected in September as firms cut prices for the 30th month in a row, a survey showed on Tuesday.

Manufacturing and services output at the bloc's top two economies, Germany and France, have also slowed.

US manufacturing activity, which held near a 4-1/2-year high this month, and tensions in the Middle East failed to lift oil prices. The United States and its Arab allies bombed militant groups in Syria for the first time on Tuesday, killing scores of Islamic State fighters.

"We've got some push-pull factors working in the market at the moment," said Le Brun of OptionsXpress, referring to geopolitical tensions and ample supplies as drivers behind oil prices.

"The major point is that the market is very well supplied."

Iraq and Nigeria are stepping up exports, adding more oil to a well-supplied market, while output at Libya has rebounded.

Libya is producing 800,000 barrels per day (bpd), up about 14 percent from Sunday, after the El Sharara oil field restarted production.

Exports from Iraq's southern terminals have averaged 2.58 million bpd, according to shipping data for the first 23 days of September tracked by Reuters, up from August's average at 2.38 million bpd.

Nigeria's oil exports is expected to hit a 14-month high in November, adding more light, sweet crude oil to an already well-supplied market.

In the United States, investors eyed weekly oil inventories data from the Energy Information Administration due later on Wednesday for demand cues at the world's largest oil consumer.

Crude inventories fell by 6.5 million barrels in the week to Sept. 19, data from industry group the American Petroleum Institute showed on Tuesday. Analysts in a Reuters poll were expecting crude inventories to have risen 400,000 barrels. – Reuters




Tags: Oil | Brent | Supplies | Syria strike |

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