  |
|
Crude prices fall as US inventories increase
AFP
NEW YORK
Petroleumworld.com 11 23 06
Oil prices sank after data showed a sharp rise in US stockpiles in the past week, muting the impact of OPEC output cuts and weather-based supply disruptions in Louisiana and Alaska.
New York light sweet crude contracts for January delivery fell 93 cents to 59.24 dollars a barrel after gaining over a dollar on Tuesday.
In London Brent North Sea crude contracts for January delivery lost 90 cents to settle at 59.49 dollars a barrel.
The US Energy Information Administration (EIA) said crude oil stocks rose by 5.1 million barrels last week to total 341.1 million -- well above average levels and above market expectations.
"Traders were stunned by such a jump in crude oil," said Phil Flynn at Alaron Trading.
"Later in the session there was some short covering ahead of Thanksgiving," he said referring to the holiday Thursday in which markets will be closed.
The gains in stockpiles came amid a rise of 1.0 million barrels a day in imports in a week when bad weather led to supply disruptions at the Louisiana Offshore Oil Port (LOOP) and at the Valdez export terminal in Alaska.
"It's very interesting that imports are so healthy considering LOOP was down last week," said Man Financial broker Bob Yawger.
"We also had some issues with the Trans Alaskan pipeline, so all those things considered we still get a build of 5.1 million barrels -- it begs the question how big the build would have been if we didn't have these problems."
The EIA also reported a 1.2-million barrel fall in distillate stocks, which include the key winter heating oil fuel. The fall, which leaves stocks at above average levels, was in line with market expectations.
But it did come amid fairly strong demand figures, which have been rising steadily ahead of winter. The EIA said distillate fuel demand over the last four weeks averaged over 4.4 million barrels a day or 9.2 percent above year ago levels.
Yawger said the demand numbers were overshadowed by the unexpected rise in crude stocks, which came despite OPEC's move last month to cut production by 1.2 million barrels a day, effective November 1.
The Organization of the Petroleum Exporting Countries' cuts are more likely in the region of 800,000 barrels a day than 1.2 million. The cartel will meet again December 14 in Abuja, Nigeria, and is widely expected to agree further output cuts.
OPEC is trying to stem a fall of around 25 percent in crude oil prices off all time peaks above 78 dollars in July and August. But it is suffering from credibility problems and non-compliance by some members.
Elsewhere, traders were monitoring news that suspected militants had taken several Nigerian oil workers hostage in an overnight attack on a vessel operated by a subsidiary of Italian oil giant ENI.
The kidnappings were the latest in a series of attacks on Nigerian oil installations that have cut output from Africa's largest producer by around 25 percent this year.
AFP 22 2029 GMT 11 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