Oil
prices drop as market focuses on US inventories
AFP
NEW YORK
Petroleumworld.com
02 23 06
World oil prices fell sharply Wednesday as traders anticipated
data showing another sharp buildup in crude inventories in the
United States.
New York's main contract, light sweet crude for delivery in April,
dropped 1.73 dollars to close at 61.01 dollars per barrel.
In London, the price of Brent North Sea crude for April delivery
slid 1.16 dollars to 60.44 dollars per barrel.
The market put aside recent concerns over violence in Nigeria
that has cut output in Africa's biggest producer of crude.
Jason Schenker at Wachovia Securities said "the market might
have overpriced the Nigerian disruption potential."
He added that there is "a well-supplied market, especially
on gasoline" that is likely to be confirmed by Thursday's
report on oil inventories.
"The expectations for inventory data tomorrow is that you
will get a buildup of crude and a buildup of gasoline," he
said.
Schenker said concerns about Iran cutting off oil supplies as
a result of the stalemate over its nuclear energy program have
also been pushed to the background, but that this could return
to the forefront.
Analysts forecast that stockpiles of US crude had risen by 700,000
barrels last week, gasoline (petrol) inventories by 800,000 barrels,
while distillates, which include heating fuel, fell by 1.4 million
barrels.
The US Department of Energy was to publish its data a day later
than normal owing to the US Presidents' Day public holiday on
Monday.
Nigerian officials said on Tuesday that they were seeking the
release of nine foreign workers being held as "human shields"
by rebel fighters.
The nine oilmen -- three Americans, a Briton, two Egyptians, two
Thais and a Filipino -- were seized on Saturday by separatist
guerrillas during an attack on energy giant Shell's Forcados oil
terminal.
Damage to the terminal and surrounding pipelines, combined with
fears for the safety of other workers, has forced the firm to
cut production by 455,000 barrels of oil per day (bpd), equivalent
to almost 20 percent of Nigeria's total output.
Nigeria, the world's sixth-biggest exporter of oil, produces light,
sweet crude, which is easier and cheaper to refine than the heavy,
sour crude produced by oil kingpin Saudi Arabia.
The market was also keeping an eye on Iran. Analysts said that
tension over Iran's nuclear program could lead to disruption of
Iranian oil exports.
Russia has said it hopes to persuade Tehran to create a joint
enterprise that will enrich uranium for Iran on Russian territory,
enabling Iran to restore a moratorium on enriching uranium at
home.
However Russian President Vladimir Putin said on Wednesday that
his country's talks with Iran were not progressing "easily."
Iran exports 2.6 million bpd and is the second-biggest producer
in the Organization of Petroleum Exporting Countries after Saudi
Arabia.
AFP
02 22 06
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