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Oil prices little changed in Asian trade
AFP
SINGAPORE
Petroleumworld.com 02 15 06Oil prices were little changed in Asian trade Thursday as a volatile market rebounded from a slide sparked by a report showing higher than expected US stockpiles of heating fuel, dealers said.
At 11:36 am (0336 GMT) New York's main contract, light sweet crude for delivery in March, was up three cents at 58.03 dollars per barrel after falling 1.06 dollars to 58.00 dollars in late US trades Wednesday.
Brent North Sea crude for April rose six cents to 57.49 dollars.
Victor Shum, senior principal at Purvin and Gertz in Singapore, said Wednesday's price fall was an over-reaction and prices firmed on Thursday.
"The market is holding steady and up a little. It's part of the volatility of trading ... The initial reaction to the (stockpiles) report was bearish with the market focussing on the smaller draw in distillates," he said.
In its weekly report the United States Department of Energy (DoE) said reserves of distillates, including heating fuel, fell by three million barrels to 133.3 million in the week ending February 9.
Analysts had expected a larger drop of four million barrels because of freezing weather in the United States, the world's biggest energy consumer.
"But the data are somewhat mixed. Even though distillates draws were lower than expected, there were some bullish spots which were the declines in crude and gasoline inventories that were contrary to expectations," said Shum.
The DoE report also showed that crude oil reserves fell 600,000 barrels last week to 323.9 million barrels, contrary to expectations of a gain of 600,000 barrels.
Gasoline (petrol) inventories slumped two million barrels to 225.2 million, against expectations of a rise of two million.
Another negative factor is the possibility of weather in the US northeast turning warmer. A cold snap has gripped the area, the world's biggest consumer of heating oil, since mid-January and driven up the demand.
"The cold hard winter is coming to an end, so winter season demand is weakening as US forecasts predict warmer temperatures over the next 10 days," Shum said.
"In the near-term, I expect trading to be below 60 dollars, range-bound from 55 to 60 dollars. It is difficult to crash the strong resistance level of 60 dollars," he added.
Separately, the market showed little apparent alarm at a threat by Al-Qaeda Wednesday to attack oil facilities outside of the Middle East that supply the United States, hinting at Canada, Mexico and Venezuela as targets.
"The market will react when there are more real threats to supply disruptions. There is a certain level of geopolitical fatigue in the market. Just talking about a threat is not enough," Shum said.
Canadian officials said they were monitoring potential threats to the country's vast energy infrastructure.
AFP 15 0348 GMT 02 07
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