Oil price rattled by US export clarification

Brent for February delivery fell 79 cents at US$57.11 as of 0728 GMT.

The price of Brent oil fell again today as the United States clarified regulations regarding the export of processed light oil and China’s factory sector contracted for the first time in seven months.

Brent for February delivery fell 79 cents at US$57.11 as of 0728 GMT. Brent has shed around 50 per cent of its value from this year’s high of US$115 a barrel reached in June due to an oil supply glut, weaker demand from Europe and Asia and a strong dollar.

Oil prices were rattled by news coming out of the United States, where the Commerce Department’s Bureau of Industry and Security published clarifications on exports of condensate a step that could flood markets outside the US with the light oil.

“Lease condensate that has been processed through a crude oil distillation tower is not crude oil, but a petroleum product. Petroleum products are subject to few export restrictions,” said the bureau in a detailed FAQ posted on its website on Tuesday.

These new guidelines do not end the embargo on most crude exports, which Congress adopted in 1975 in response to the Arab oil embargo.

Meanwhile, China, the world’s second largest oil consumer after the United States, saw the final HSBC/Markit Purchasing Managers’ Index (PMI) for this month coming in at 49.6, down from the final 50.0 in November. The 50.0 mark separates growth from contraction.

dalsaadi@thenational.ae

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Published: December 31, 2014 04:00 AM

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