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Oil prices mixed as downtrend consolidates
AFP
NEW YORK
Petroleumworld.com 09 14 06
Oil prices finished mixed Wednesday as the market consolidated near multimonth lows and mulled the latest US inventory figures, traders said.
New York's main contract, light sweet crude for delivery in October, climbed 21 cents to close at 63.97 dollars per barrel.
In London, Brent North Sea crude for October delivery settled at 62.99 dollars per barrel, unchanged from the prior day.
Earlier on Wednesday, light sweet crude fell to 63.50 dollars, the lowest level since March 27. Brent dropped to 62.63 dollars, last seen on March 23.
Traders digested the latest US inventory data that showed stockpiles of crude oil fell over the past week but supplies of gasoline and refined products rose.
Falling oil prices are not uncommon at this time of year, when gasoline, or petrol, consumption traditionally tapers off and winter fuel demand has yet to accelerate, analysts noted.
But the market has been especially weak lately on fading supply worries, comfortable inventories, a mild Atlantic hurricane season, OPEC's pledge to keep output unchanged and a lessening of tensions over Iran's nuclear drive.
"This is a very seasonal correction, we're at a seasonal low point for product demand and a seasonal low point for crude demand," Calyon analyst Mike Wittner said.
He added however that maintenance and cuts to refinery runs in Asia will eventually start to tighten product demand, while data indicates that Chinese demand remained solid in July.
Some said the market had strong downward momentum in a retreat from record highs in recent months.
"The sharp selloff yesterday makes the technical setup decidedly negative," said Mike Fitzpatrick at Fimat USA.
"There looks to have been some overnight buying ahead of this morning's inventory data though. Given that prices have retreated sharply with the same elements in place that drove them higher in the first place there is also no reason to think that a sustained recovery is underway either."
Oil prices fell heavily on Tuesday on fears about slowing demand after the International Energy Agency lowered its world oil demand estimates for this year and next, and said oil consumption may be slowing for the first time in seven years.
Elsewhere, Nigeria's crude oil exports flowed without disruption Wednesday despite the start of a three-day warning strike by the country's two main oil unions, industry officials said.
Nigeria, Africa's biggest oil producer, is the world's sixth biggest crude exporter with 2.6 million barrels per day, but a quarter of that figure is currently lost to unrest in the Niger Delta.
British energy giant BP -- already under fire for an oil spill in Alaska -- meanwhile faced a new spill in California but said it had "no significant impact on the environment."
In a statement late Tuesday, BP said it was working in conjunction with federal, state and local officials to clean up a release of approximately 1,000 barrels of "refined product" in an industrial area in the Port of Long Beach.
AFP 13 2008 GMT 09 06
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