By Cassie Werber
LONDON--Crude oil futures traded lower Monday, as tension in several parts of the globe failed to shift the commodity out of a range it has traded in for the last eight days.
ICE September crude was down 0.66% at $107.68 a barrel. WTI crude on the Nymex exchange was down 0.62% at $101.46 a barrel.
"Challenges remain given weak crude demand in Europe and Asia combined with excess cargoes in the Atlantic Basin," analysts at Morgan Stanley wrote in a note to investors.
Prices may need to fall further, they said, before buyers become interested again. A lower price could also shift trade flows or lead to a strategic reduction of supply, for example from a swing producer such as Saudi Arabia.
Risks remain in the world's hot spots.
"Geopolitical developments are sure to keep the oil market on its toes," analysts from research firm JBC Energy wrote in a note to clients. Fresh fighting has erupted in Libya, which has been trying to ramp up its oil output, they noted, while the European Union expanded its sanctions list targeting Russia over the weekend.
They also noted that the U.S. Coast Guard gave approval for a crude cargo originating from Kurdistan to unload off the Texas coast--a move which follows several months of disputes between the autonomous Kurdish region, which wants to export its oil, and Iraq, which wants to prevent it from doing so.
"The development is sure to increase tensions between Baghdad and the KRG authorities," JBC said.
Recently the ICE's gas oil contract for August delivery was up $2.25 at $894.25 a metric ton, while Nymex gasoline for September delivery was down 94 points at $2.8308 a gallon.
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(END) Dow Jones Newswires
July 28, 2014 06:11 ET (10:11 GMT)
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