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World oil prices mixed as US energy stockpiles fall
AFP
NEW YORK
Petroleumworld.com 08 10 06World oil prices were mixed Wednesday as a government report showed heavy falls to US energy stocks even before BP began shutting down the biggest US oil field.
Traders were also monitoring the latest kidnapping of oil workers in Nigeria, the biggest producer and exporter of crude in Africa.
New York's main contract, light sweet crude for delivery in September, closed up four cents at 76.35 dollars per barrel.
The contract remains off its historic record of 78.40 dollars per barrel struck in mid-July in reaction to the Israeli-Lebanese conflict.
In London, Brent North Sea crude for September delivery settled 27 cents lower at 77.28 dollars per barrel, down from a new peak of 78.64 dollars reached on Monday.
The contract had soared as high as 78.43 dollars earlier Wednesday.
US prices gained support after the Department of Energy announced in a weekly update that gasoline stocks fell steeply by 3.2 million barrels to 207.7 million in the week to August 4.
That was more than three times the market's expected drop of 1.0 million barrels.
It was also the biggest fall in US petrol inventories since mid-April, reflecting robust demand as many North Americans take to the roads for summer vacations.
However, gasoline stocks still remain 0.8 percent higher than at the same stage of 2005, the DoE said.
Crude stocks fell 1.1 million barrels to 332.6 million barrels, compared with analysts' forecast for a decline of 1.0 million barrels.
"The shocker continues to be robust gasoline demand in the face of high prices," said Bill O'Grady, an analyst at AG Edwards.
"Due to the gasoline data, we would view the numbers as bullish," O'Grady said.
Brent crude struck its historic high on Monday after British energy giant BP started shutting down operations at Alaska's vast Prudhoe Bay oil field, after corrosion sparked a small oil spill in an ageing pipeline.
A BP spokesman in London said the shutdown could be staggered to allow pipelines to continue pumping crude.
The company has moved to lock up 400,000 barrels per day of oil, or about 8.0 percent of total US oil production.
However, Bob Malone, chairman of BP America, told CNN television that BP was trying to see if it could continue pumping at least 200,000 barrels of oil while it works to fix its Alaskan operations.
"My focus right now and that of BP is to find out if we can safely continue to operate the west side of the field that's currently producing 200,000 barrels a day," Malone said.
Analysts predict that the field could be out of action until at least January.
Traders were also following developments in the Middle East and Nigeria.
"Continued violence in the Middle East is still supporting oil prices, with Israeli forces pushing deeper into southern Lebanon and facing fierce resistance" from the Lebanese Hezbollah militia, said Sucden analyst Michael Davies.
In Nigeria late Tuesday, two Norwegians and two Ukrainians working on an oil supply vessel were kidnapped, the Norwegian government and the ship's operators said.
AFP 09 1955 GMT 08 06
Copyright ©2006 AFP. All Rights Reserved.
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