Brent crude oil began 2014 caught between supply worries and weakening demand. The commodity finished 2013 flat after supply interruptions in North Africa kept weakened demand from depressing its prices. Brent traded at $111.20 at 8:30 GMT on Thursday morning as investors looked the ongoing conflict in Libya and South Sudan for signs of easing.
CNBC reported that traders have been optimistic about the possibility that Libyan oil exports could pick up in the near term as some smaller oilfields have begun to resume production. The nation's oil export capacity has been more than halved since the summer as tribesmen and civil servants protest for more political rights and a cut of the nation's oil revenue. The country's Sarir and Messla oilfields have reopened, but the Hariga port which connects them remained closed, preventing exports from resuming.
In South Sudan, spreading violence has decreased the nation's oil exports to 200,000 barrels per day over the past week. However, rebel forces agreed to a ceasefire on Tuesday and the nation's government is expected to begin talks in order to end the conflict.
Weak demand has been in the back of investors minds as a slow down in China has decreased the number two oil consuming nation's crude appetite. Also weighing on crude prices is the improving relationship between the West and Iran. Although the two sides have not yet agreed to ease sanctions on Iranian oil, continued progress could result in the reintroduction of nearly 1 million barrels of Iranian oil to the market in 2014.
Moving forward investors will keep their attention tuned into the Middle East as the volatile relationships between oil rich nations will remain a risk to supply in 2014.