World
 
|
Crude oil prices leap as US stocks slide
AFP
NEW YORK
Petroleumworld.com 10 26 06
World oil prices soared on Wednesday, with Brent crude back above 62 dollars a barrel, as official data showed that US energy stockpiles fell across the board last week.
The drop in US inventories spooked markets, coming after the OPEC cartel announced it was scaling back production in a bid to arrest a recent slump in prices.
New York's main contract, light sweet crude for delivery in December, jumped 2.05 dollars to close at 61.40 dollars a barrel.
In London, Brent North Sea crude for December delivery surged 2.22 dollars to 62.08 dollars a barrel.
"The big story was the steep drop in the crude imports, which maybe means that some OPEC countries have already started to reduce their production," Phil Flynn at Alaron Trading said.
The US Department of Energy said Wednesday that crude oil inventories unexpectedly declined 3.3 million barrels to 332.3 million in the week to October 20, compared with market forecasts of an increase by a similar amount.
That was the strongest weekly fall since July and came as cold temperatures took grip in the northeast United States. But the DoE said crude levels "remain well above the upper end of the average range for this time of year".
US crude oil imports averaged 9.5 million barrels per day last week, down a hefty 936,000 from the previous week.
Levels of distillate products, such as heating oil and diesel fuel, were down 1.4 million barrels to 144.0 million over the week. Gasoline or petrol stocks fell 2.8 million barrels to 207.4 million.
Prices began rebounding on Tuesday on concerns that cold US weather would ramp up demand for heating fuel ahead of the northern hemisphere winter, traders said.
"The rather early cold snap in the US has served to reinforce the fact that weather is an increasingly key variable ... at this time of year," Barclays Capital oil analyst Kevin Norrish said.
The US northeast, the world's biggest consumer of heating fuel, is expected to see temperatures of between five and 15 degrees Celsius below the seasonal average until at least the start of November, according to forecasters.
The market has meanwhile been awaiting evidence from the Organization of the Petroleum Exporting Countries that the 11-member cartel will cut output, as promised last Friday, by 1.2 million barrels per day beginning November 1.
"The UAE (United Arab Emirates) joined the Saudis yesterday in informing customers of export cuts to come," Fimat analyst Mike Fitzpatrick said.
"But other members have yet to provide evidence. With oil prices still relatively high there is still a good bit of skepticism that the cartel can enforce quota discipline," he said.
Norrish added: "The general skepticism on OPEC is perhaps showing some very slight signs of weakening in the face of more notifications of cuts to customers ... and further tanker-tracking evidence that some cuts have already taken place."
AFP 25 2037 GMT 10 06
Copyright ©2006 AFP. All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels