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Oil prices lower in Asian hours after rise in US gasoline stocks
AFP
SINGAPORE
Petroleumworld.com 08 24 06
Oil prices were weaker in Asian hours Thursday after an unexpected rise in US gasoline reserves, dealers said.
At 9:45 am (0145 GMT) New York's main contract, light sweet crude for October delivery, fell three cents to 71.73 US dollars a barrel from its close of 71.76 dollars in the United States Wednesday, where it had dropped 1.34 dollars.
Brent North Sea crude for October delivery rose five cents to 72.07 dollars.
The US Department of Energy said Wednesday in its weekly report gasoline stocks rose by 400,000 barrels in the week to August 18 to 205.8 million barrels. Analysts had anticipated a decline of more than two million.
The increase was achieved despite robust demand for petrol with many Americans on the roads for summer vacations.
It came also despite the shutdown of about half of output at the gigantic Prudhoe Bay oil field in Alaska, where British energy giant BP is scrambling to overhaul its pipelines after one sprang a leak.
"It dropped last night because the US (gasoline) inventory seems comfortable, more comfortable than what people thought," said Tobin Gorey, a commodities analyst with Commonwealth Bank of Australia in Sydney.
The surprise gain in US gasoline stocks is still having some impact on crude prices in Asian hours, he said.
Crude oil inventories fell by 600,000 barrels to 330.4 million barrels last week, smaller than the drop of 1.35 million barrels forecasted by analysts.
Going forward, prices will likely hold above 70 dollars with traders still concerned over Iran, which is locked in a standoff with the West over its nuclear programme.
World powers reacted coolly Wednesday to Iran's response in the nuclear standoff with Washington saying it fell short of UN demands and France insisting Tehran immediately suspend uranium enrichment activities.
"We acknowledge that Iran considers its response as a serious offer, and we will review it," said US State Department spokesman Gonzalo Gallegos said.
"The response, however, falls short of the conditions set by the Security Council, which require the full and verifiable suspension of all enrichment-related and reprocessing activities," he said.
"We are consulting closely, including with other members of the Security Council, on next steps."
The Security Council adopted a resolution last month giving Iran until August 31 to freeze its uranium enrichment program or face sanctions.
Iran is the world's fourth largest crude producer, pumping about 4.0 million barrels of oil per day of which around 2.7 million barrels are exported, and traders fear vital supplies could be affected if sanctions are imposed on the Islamic republic.
AFP 24 0208 GMT 08 06
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