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World oil prices remain under pressure
By Perrine Faye
AFP
LONDON
Petroleumworld.com 11 24 06
World oil prices remained under pressure Thursday following an unexpectedly big rise in US stockpiles in the last week and rumors of a resumption of oil deliveries from Alaska.
By 1725 GMT on the New York Mercantile Exchange (Nymex), a barrel of "light sweet crude" for delivery in January was showing a fall of 14 cents to 59.10 dollars, following a drop of 93 cents on Wednesday.
Trade was limited as the market did not open Thursday and will remain closed Friday because of the Thanksgiving holiday in the United States.
In London, by 1700 GMT, Brent North Sea crude contracts for January delivery lost 16 cents to 59.33 dollars, following a fall of 90 cents on Wednesday.
The market reacted Thursday to rumors that tankers have resumed loading oil at the key Valdez export terminal in Alaska, as weather improved.
The terminal had been closed since Monday because of the inclement weather, which cut supplies by up to 35 percent through the Trans Alaska Pipeline, which has a capacity of 800,000 barrels per day.
Prices have also been under pressure since the US Energy Information Administration (EIA) said that crude oil stocks rose by 5.1 million barrels last week to total 341.1 million -- well above average levels.
The market expected a gain of around 600,000 barrels.
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.
Citigroup analyst Tim Evans said the data was "more bearish than anticipated" but added he still thinks "the big picture points to higher prices over the next few months."
"The builds may have been something of a one-off event and we still have the combination of limited stocks, rising seasonal demand for petroleum and OPEC production cuts," he said.
The Organization of Petroleum Exporting Countries, which exports 40 percent of the world's crude, pledged to cut output by 1.2 million barrels per day starting November 1 in a bid to shore up prices, which have shed nearly 20 dollars since August.However, until now the market has been skeptical about how seriously the cartel will implement the decision, with most analysts expecting a reduction of only about 600,000 barrels a day.
OPEC meets in Nigeria on December 14 and could again cut supply.
Energy Minister Rafael Ramirez of Venezuela, a founding OPEC member, told Venezolana television that OPEC would agree on a new cut in oil production at the meeting to stabilize prices. He said a consensus exists.
Bruce Evers, an analyst at Investec bank, said: "There is still a lot of uncertainty about how much (production) has OPEC actually cut."
He cited the well-informed Petroleum Intelligence Weekly as saying Thursday that OPEC has actually cut 1.1 out of 1.2 million barrels per day. "If it's true, the market would rally quite strongly," he added.Nonetheless, "the market remains in a negative mood," Evers said, adding: "Fifty eight dollars seems to be the floor at the moment, so if prices go over 60, people are selling."
AFP 23 1813 GMT 11 06
Copyright© 2006 AFP. All Rights Reserved.
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