Brent crude fails to extend gain as Turkey oil flows continue

Bloomberg

Brent crude held below the highs reached following a failed coup in Turkey last week as shipments continued through the vital conduit for oil from Russia and Iraq to the Mediterranean Sea.
Futures were little change in London, below levels touched on Friday as the coup raised concern about potential disruptions. Oil tankers are loading and unloading cargoes at Turkey’s ports and supplies are arriving in ships and pipelines from neighboring countries, an Energy Ministry official said on Sunday, declining to be identified in line with ministry rules regarding comments to news media. President Recep Tayyip Erdogan ordered reprisals for the failed attempt to oust him.

Turkey Oil Infrastructure
“There are obviously concerns about the situation,” Ric Spooner, a chief market strategist at CMC Markets, said by phone from Sydney. “As it usually does in these circumstances, the market is looking through anything that doesn’t look like a clear and present threat for disruptions.”
Brent for September settlement was $47.57 a barrel on the London-based ICE Futures Europe exchange, down 4 cents, at 7:50 a.m. London time. Prices climbed as high as $48.25 on Friday in the aftermath of the coup. The global benchmark crude traded at a $1.03 premium to the equivalent contract for West Texas Intermediate.

Major Chokepoint
WTI crude for August delivery fell 9 cents to $45.86 a barrel on the New York Mercantile Exchange. The contract closed 0.6 percent higher at $45.95 a barrel on Friday. Prices are up about 24 percent this year.
The Turkish Straits, including the Bosphorus and Dardanelles, are one of the world’s major chokepoints for seaborne crude, with about 2.9 million barrels of oil passing through daily in 2013, the latest year of available data from the U.S. Energy Information Administration. No cargoes have been halted since large tankers were barred for security reasons from sailing in the Bosphorus waterway near Istanbul for several hours on Saturday, a port agent said.
Turkey is also home to pipelines that transport crude and condensate from nations including Iraq and Azerbaijan to the port of Ceyhan, on the Mediterranean Sea in southern Turkey. BP Plc, operator of the Baku-Tbilisi-Ceyhan pipeline from Azerbaijan via Georgia, confirmed that oil was flowing uninterrupted.
“Even though it looks like Turkey has successfully put down the coup, what happens next is still an open question and is causing a bit of concern,” Angus Nicholson, a markets analyst at IG Ltd. in Melbourne, said by phone. “Global markets are also rallying and that’s a positive for oil prices.”
In Nigeria, Exxon Mobil Corp. declared a force majeure on Qua Iboe crude after “a system anomaly observed during a routine check of its loading facility,” the company said in an e-mailed statement Friday. Qua Iboe is the third Nigerian crude grade to be declared under force majeure currently, joining Brass River in May and Forcados in February, according to information from companies compiled by Bloomberg.