(Bloomberg) -- Brent crude slipped following a failed coup in Turkey as shipments continued through the vital conduit for oil from Russia and Iraq to the Mediterranean Sea.
Futures declined 1 percent, erasing all of the gains triggered by the attempted coup on Friday. Oil tankers are loading and unloading at Turkey’s ports and supplies are arriving in ships and pipelines from neighboring countries, an Energy Ministry official said Sunday, asking not to be identified in line with ministry rules. President Recep Tayyip Erdogan ordered reprisals for the attempt to oust him.
“Although the coup failed, it serves us with a stark reminder about the political instability in the Middle East,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. “Further domestic tension and power struggle cannot be excluded along with its impact on regional and global economies and on the oil market.”
Brent for September settlement traded at $47.11 a barrel on the London-based ICE Futures Europe exchange, down 50 cents, at 1:18 p.m. local time. Prices climbed as high as $48.25 on Friday in the aftermath of the coup. The global benchmark crude traded at a premium of 92 cents to the equivalent contract for West Texas Intermediate.
WTI crude for August delivery fell 45 cents to $45.50 a barrel on the New York Mercantile Exchange. The contract closed up 0.6 percent at $45.95 on Friday. Prices have risen about 23 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 from sailing in the Bosphorus waterway near Istanbul for several hours on Saturday, a port agent said.
The country 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.
- In Nigeria on Friday, Exxon Mobil Corp. declared force majeure on Qua Iboe crude following “a system anomaly observed during a routine check of its loading facility.” Qua Iboe is the third Nigerian crude grade currently under force majeure, joining declarations made on Brass River in May and Forcados in February, according to information from companies compiled by Bloomberg.
- In Libya, a sit-in by employees of the Petroleum Facilities Guard over late salaries halted exports at the port of Hariga, according to Arabian Gulf Oil Co. An oil shipment of 600,000 barrels was stranded at the port and the company’s production was cut by half on Sunday to 90,000 barrels, a spokesman said. Output is expected to halt within a week if the sit-in continues.
- Hedge funds and other speculators curbed their bullish stance in Brent crude for a fifth week, the longest pullback in a year.