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Oil prices up after US inventories data
AFP
NEW YORK
Petroleumworld.com 06 15 06World oil prices rose modestly Wednesday after the latest weekly snapshot of US energy inventories.
New York's main contract, light sweet crude for delivery in July, advanced 58 cents to close at 69.14 dollars.
In London, Brent North Sea crude for July delivery added six cents to 66.98 dollars a barrel.
Fimat energy analyst Steven Bellino said crude futures had recovered some ground on a "technical bounce" after a recent drop in prices.
But he added: "I wouldn't be surprised if we saw another rally above 70 (dollars a barrel) this week."
According to the Department of Energy, US reserves of gasoline rose in the past week but crude oil stocks fell.
The DoE's weekly inventories report showed crude oil reserves fell by 900,000 barrels to 345.7 million barrels in the week to June 9.
Analysts had expected a smaller fall in crude stocks of 700,000 barrels, but the DoE said they still remained "well above the upper end of the average range for this time of year".
Reserves of gasoline, which are under scrutiny as US drivers take to the roads en masse for summer holidays, rose by 2.8 million barrels last week to 213.1 million.
That was double the forecast rise.
US inventories of distillate fuels such as diesel and heating oil rose by 2.1 million barrels to 122.8 million.
The DoE also reported that US refineries operated at 92.7 percent capacity in the past week, up from 91 percent in the prior week.
World oil prices had slumped by about two dollars Tuesday on expectations that global central banks will get tough on inflation by raising interest rates, which would curb economic growth and hence demand for crude.
Prices were hit also by signs that the first tropical storm of the Atlantic hurricane season, Alberto, will miss US rigs in the Gulf of Mexico, dealers said.
Elsewhere, Iran's nuclear programme is still of concern to the oil markets as long as Tehran and the West fail to reach agreement to defuse the crisis.
Iran has been offered a package of incentives to stop its nuclear programme but has yet to say if it will accept the deal.
The Islamic republic is the world's fourth-biggest producer of crude and traders fear supplies could be disrupted if international sanctions are imposed in the event that Iran refuses to renounce uranium enrichment.
Washington and its allies fear that Iran is secretly trying to build nuclear weapons. Tehran insists its work is strictly for civilian energy purposes.
"There remains the risk of a sharp spike in prices as a result of ongoing tensions in Iran, Iraq and Nigeria and from the prospect of another active Atlantic hurricane," Sucden analysts noted.
Iraq and Nigeria are major producers of oil but violence in both countries has disrupted their exports.
Since January, Nigeria's Niger Delta region has been a theatre of violence against foreign energy companies and their employees, launched by armed separatists and local communities demanding a larger share in oil revenues and compensation for environmental destruction.
AFP 14 1947 GMT 06 06
Copyright ©2006 AFP. All Rights Reserved.
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