Oil prices soar above 63 dollars a barrel


AFP
NEW YORK
Petroleumworld.com 03 15 06

World oil prices jumped Tuesday above 63 dollars a barrel on fears of tight US stockpiles and threats to supplies from Nigeria and Iran, traders said.

New York's main contract, light sweet crude for delivery in April, climbed 1.33 dollars to close at 63.10 dollars a barrel.

In London, the price of Brent North Sea crude for April delivery jumped 1.77 dollars to end at 63.97 dollars a barrel.

The rally continued from Monday, when US crude prices had spiked almost two dollars to rebound from a six percent slide last week.

Earlier Tuesday, crude futures fell after the International Energy Agency published strong downward revisions to its forecasts of demand for global oil.

But Fimat analyst Mike Fitzpatrick argued that crude futures were being supported in part by concerns that Iran, the world's fourth biggest oil producer, could halt exports if hit by UN sanctions over its nuclear programme.

He added that prices may be winning support also from "ongoing concern of US summer gasoline tightness".

US demand for gasoline, or petrol, surges during the so-called summer driving season that begins in May, when US drivers take to the open roads on vacation.

The US Department of Energy was to publish a weekly report on US fuel stockpiles Wednesday.

Energy analysts at JP Morgan Chase Bank predicted the report would show a fall of 2.5 million barrels in US gasoline inventories over the past week.

Distillates such as heating oil and diesel are seen falling 3.5 million barrels, but US crude inventories should rise 7.2 million barrels, they said.

The Paris-based IEA predicted that global oil demand growth in 2006 would increase by 1.8 percent, lower than the 2.1-percent rise it forecast in February, in the face of high prices and sluggish demand in Southeast Asia.

Demand growth should come to 1.49 million barrels per day (bpd) in 2006 instead of 1.78 million, it said in a monthly report.

The IEA noted a recent fall in oil prices from January highs.

"A look at fundamentals suggests that while there may be some justification for a moderation in prices, the road ahead is far from smooth," it said.

The agency warned that in the next few months "strong world economic growth and rising crude demand, physical supply unpredictability in Iraq and Nigeria and low Pacific product stocks are likely to counterbalance additions to capacity".

The IEA estimated that crude supply in Nigeria fell by 80,000 bpd in February to 2.27 million bpd in response to attacks on pipelines by militants of the Movement for the Emancipation of the Niger Delta.

The violence in Nigeria has cut some 20 percent of oil output in Africa's biggest producer of crude.

The separatist guerrillas dashed official hopes Tuesday for an imminent release of three US and British oil workers being held hostage in the Niger Delta swamps, amid mounting fears for their safety.

AFP 03 14 06

Copyright © 2006 AFP. All Rights Reserved.

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