Oil prices drop after US inventory data

Posted: 02 July 2009 0417 hrs

An attendant fills a car with petrol at a service station.

NEW YORK: Oil prices fell on Wednesday after bouncing above 71 dollars as markets reacted to a mixed report on US petroleum inventories.

New York's main contract, light sweet crude for August delivery fell 58 cents from Tuesday's closing price to 69.31 dollars a barrel.

Brent North Sea crude for August delivery lost 51 cents to 68.79 dollars per barrel.

The US Department of Energy said in its weekly report that American crude oil reserves tumbled 3.7 million barrels in the week ending June 26, the fourth weekly drop in a row.

The market had expected a lighter decline of 2.1 million barrels.

But the department also reported growing domestic inventories of key refined products gasoline and distillates.

Gasoline or petrol stocks rose 2.3 million barrels, and distillates, which include diesel and heating duel, increased by 2.9 million barrels last week.

"Product demand is simply awful. Products built more than expected, and the expectations were already bearish," said Hussein Allidina of Morgan Stanley Research.

Prices had dropped Tuesday from eight-month peaks above 73 dollars after new data showed a plunge in American consumer confidence.

In the second quarter of 2009, oil had jumped dramatically - by 40 percent, or more than 20 dollars - on rising confidence that the global slump is easing.

Barclays Capital said in a report on Wednesday that oil prices cannot be sustained below 70 dollars into the medium term.

"We see prices as being likely to stay largely within the 65-75 dollars range in the current quarter, with brief forays possible either side of that range, and have adjusted price forecasts to reflect that core view," it said.

The market remains concerned by tensions in key crude producer Nigeria.

Nigerian rebels on Monday announced a new raid against a Shell oil facility and said they had killed at least 20 soldiers in a gun battle, a claim denied by the security forces.

While a Shell spokesman confirmed the raid and said it had caused a loss of production, Nigeria's combined police and army joint task force (JTF) denied there had been any clash with the rebels.

The Niger Delta has since 2006 been rocked by violence by armed groups who say they are fighting for a greater share of the region's oil wealth for the local population. - AFP/de

From ChannelNewsAsia.com; see the source article here.

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Oil prices climb above US$70 on Nigeria violence

Posted: 26 June 2009 0533 hrs

A man fills his car with petrol at a service station

NEW YORK - Oil prices rose back above 70 dollars Thursday as renewed violence in key crude producer Nigeria and a forecast of a higher price range sparked buying.

New York's main futures contract, light sweet crude for delivery in August, jumped 1.45 dollars to 70.12 dollars a barrel.

London's Brent North Sea crude for August rose 1.45 dollars to 69.78 dollars.

"The news from Nigeria (about) more attacks on oil facilities and the fact that two refineries are now shut down are supporting the market," said Andy Lipow, President at Lipow Oil Associates.

"The market has lived with Nigeria's supply disruption now for three years," he said.

Nigerian rebels on Thursday said they carried out a pre-dawn attack against Royal Dutch Shell facilities in a warning to Russia not to invest in the country's oil and gas industry.

The Movement for the Emancipation of the Niger Delta (MEND) said the attack was to coincide with a visit to Nigeria by Russian President Dmitry Medvedev during which major energy investment deals were struck.

The attack on the Bille-Krakrama pipeline, which feeds the key Bonny export terminal in southern Rivers State, was carried out shortly after midnight Thursday.

Nigerian President Umaru Yar'Adua meanwhile on Thursday gave militants in the oil-rich Niger Delta 60 days to accept an amnesty offer in a bid to halt attacks on international oil companies.

MEND, the main militant group in the oil-rich southern Nigeria, stages regular attacks on oil installations as part of its campaign for a fairer share of oil wealth for locals in the Delta region.

Nigeria's oil production has been cut by a quarter over the past three years because of the attacks.

Crude oil futures plunged from record high points of more than 147 dollars in July 2008 to about 32 dollars in December as the economic downturn ravaged energy demand but the market has since clawed back ground on recovery hopes.

Oil prices had lost ground over the past week amid signs of a broader consolidation in the 65-75 dollar range, analysts at Barclays Capital said in a note to clients.

"Accompanying the transition in the macroeconomic backdrop, the oil market is, in our view, moving towards a transition period of very gradually improving demand, falling inventories, and prices closer to the desired range of key producers, which we would place in the 75-85 dollars region," the report said.

"While the current phase of market rebalancing might need to reach a more advanced stage before prices can comfortably move into producers' desired range, that move, in our view, is set to happen sometime through the year, with the broad trend for prices likely remaining to the upside."

- AFP /ls

From ChannelNewsAsia.com; see the source article here.

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Oil prices bounce above $60 in New York

AFP - Wednesday, May 20

Oil rigs extract petroleum in the Los Angeles area community of Culver City, California. Oil prices jumped to a six-month high above 60 dollars on Tuesday on growing signs of economic recovery amid concerns about unrest in African crude producer Nigeria, traders said.

LONDON (AFP) - - Oil prices jumped to a six-month high above 60 dollars Tuesday on growing signs of economic recovery amid concerns about unrest in African crude producer Nigeria, traders said.

New York's main futures contract, light sweet crude for delivery in June, rallied to 60.48 dollars a barrel -- a level last seen on November 10. The contract later stood at 59.90 dollars, up 87 cents from Monday's close.

Brent North Sea crude for July delivery touched a six-month high of 59.65 dollars a barrel before pulling back to 59.05 dollars, up 58 cents from Monday.

"Gains in the stock market increased optimism that the global economy is recovering," said BetOnMarkets analyst David Evans.

Global equity markets posted fresh gains Tuesday on hopes that the global economy is through the worst of its slump, setting the stage for a pick-up in energy demand, dealers said.

In early afternoon stock market trading in Europe, Frankfurt rallied 2.03 percent, Paris gained 0.82 percent and London climbed 0.61 percent.

In Asia, Hong Kong added 3.06 percent, Tokyo put on 2.78 percent, Seoul advanced 2.99 percent, Sydney added 2.19 percent and Taipei gained 1.18 percent.

Oil jumped by around two and a half dollars on Monday as traders tracked prospects of a global economic recovery, rising shares on Wall Street and developments in Nigera.

New York share prices shot higher Monday after better-than-expected earnings from home improvement retailer Lowe's helped reinforce hopes for a recovery in the United States.

A strong US economy is a key growth engine for the world because it is a major export market for many countries -- and is the biggest energy consuming nation on the planet.

Prices were also boosted by rising violence in oil exporter Nigeria, where the country's main armed group said it had ordered a blockade of key shipping channels in a bid to inflict further damage on the energy industry. Nigeria's military has urged oil firms to ignore the threat.

"Fresh violence in Nigeria helped to support prices," said VTB Capital analyst Andrey Kryuchenkov. "Militants there claimed to have sabotaged two pipelines, while threatening more supply disruptions."

Unrest in the oil-producing Niger Delta region has reduced Nigeria's daily output to 1.76 million barrels compared with 2.6 million barrels in January 2006.

From Yahoo! News; see the source article here.

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