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Oil prices gain on US supply concerns
AFP
NEW YORK
Petroleumworld.com 06 23 06
World oil prices advanced further on Thursday as the market focused on tight supplies of US gasoline, analysts said.
New York's main contract, light sweet crude for delivery in August, climbed 51 cents to close at 70.84 dollars per barrel.
In London, Brent North Sea crude for August delivery rose 78 cents to 69.95 dollars per barrel.
"Oil futures were higher, continuing yesterday's (Wednesday's) gains on a smaller-than-expected rise in US gasoline stocks," Sucden analyst Sam Tilley said.
US official figures released Wednesday showed US crude oil reserves rose by 1.4 million barrels to 347.1 million last week, much stronger than the rise of 500,000 expected and taking inventories to their highest level since late May 1998.
However gasoline stocks rose 300,000 barrels to 213.4 million, well below the 1.5-million-barrel gain expected.
The "rise in gasoline stocks was not deemed enough by the market considering that demand in the US is currently at its highest at this time of year as a result of the summer driving season," Tilley said.
Gasoline numbers are under scrutiny as drivers in the United States begin taking to the roads en masse for their summer holidays.
Over the past four weeks, US demand for gasoline has been running 0.9 percent higher than a year ago, according to the US report.
"We are not even in the top season of gasoline demand. July-August should be a more important period where we will see prices going up," said Tetsu Emori, a Tokyo-based commodities strategist with Mitsui Bussan Futures.
Meanwhile, the market watched developments regarding Iran's controversial nuclear programme and how it could impact crude supplies.
Analysts say that any move to apply UN sanctions against Iran, the world's fourth-biggest oil producer, over its programme would cause the country to retaliate and cut its crude exports.
Senior Iranian officials are to meet with European Union foreign policy chief Javier Solana in the coming weeks, officials said Thursday as pressure mounted on the Islamic republic to give a quick reply to an international nuclear proposal.
Solana handed Iran the proposal from the five permanent UN Security Council members -- Britain, China, France, Russia and the United States -- plus Germany on June 6.
It promises incentives and multilateral talks if Iran agrees to temporarily halt uranium enrichment, work that is at the centre of fears the hardline regime could acquire nuclear weapons.
Iran insists its programme is purely for peaceful electricity generation. burs/vs/ch
AFP 22 1955 GMT 06 06
Copyright ©2006 AFP. All Rights Reserved.
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