Oil prices extend losses on strong US inventories
By Julie Charpentrat
AFP
NEW YORK
Petroleumworld.com 02 16 06
Oil prices fell to two-month lows Wednesday on global markets
after US inventory data revealed healthy stockpiles, traders said.
New York's main contract, light sweet crude for delivery in March,
tumbled 1.92 dollars to close at 57.65 dollars per barrel, the
lowest since December 19. Prices have slumped some 13 percent
since a peak in early February.
In London, the price of Brent North Sea crude for April delivery
dropped 1.37 dollars 58.15 dollars per barrel in closing deals.
Prices tumbled after a report on US inventories showed better-than-expected
reserves of US crude oil and refined products.
The Department of Energy reported that crude oil reserves rose
by 4.9 million barrels to 325.6 million in the week to February
10. The rise was well above the gain of 1.1 million barrels forecast
by private economists.
Gasoline inventories meanwhile increased 2.2 million barrels to
225.5 million, also ahead of the average analyst forecast of a
rise of 1.4 million barrels.
Reserves of distillates, used for heating and diesel fuel, rose
900,000 barrels to 136.9 million, according to the DoE.
Jason Schenker at Wachovia Securities said the report showing
supply increases in all categories was "fundamentally bearish
for prices on the supply side of the equation."
Ample supplies are helping the market push aside concerns about
the Iranian nuclear dispute -- which helped take prices nine percent
higher in January -- with some traders betting the dispute will
not lead to supply cuts.
The market also shrugged off news that OPEC is forecasting higher
global demand for crude this year.
World demand for crude oil is expected to rise by 1.89 percent
in 2006 to 84.64 million barrels per day, the oil-producing cartel
said in its monthly report.
Mike Fitzpatrick at Fimat USA said the steep declines in recent
session have wiped out the increases earlier this year for oil
prices. But he remains somewhat cautious.
"Most participants are blaming the collapse of gasoline,
rising inventories and the lowering of geopolitical tensions,"
he said. "Still, as we have been saying for the last several
weeks, the elements that brought prices to this level have not
really changed all that much."
Phil Flynn at Alaron Trading suggests prices could rebound after
the steep declines.
"The most obvious thought is that oil prices might go into
the mid-50s and that could lead to second thoughts on maintaining
production levels," he said.
"Worrying about a second quarter demand drop and a glut of
oil, OPEC may want to put on the breaks at their March meeting.
OPEC can also read US supply data."
AFP
02/15/06
Copyright
© 2006 AFP. All rights reserved
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