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Oil prices fall on easing supply concerns
AFP
LONDON
Petroleumworld.com 02 15 06World oil prices fell heavily Wednesday after a weekly report on US energy stockpiles revealed that distillates stocks had not fallen as sharply as many analysts had expected.
Market participants said the report suggested that demand for heating oil was not flaring dramatically higher despite a cold snap across the US northeast.
Markets meanwhile appeared to shrug off news that the Saudi branch of Al-Qaeda has called for attacks on oil installations in countries that supply crude to the United States, including nations outside the Middle East.
New York's main oil futures contract, light sweet crude for delivery in March, closed down 1.06 dollars at 58.00 dollars per barrel.
In London, the price of Brent North Sea crude for April delivery settled down 1.35 dollars at 57.43 dollars per barrel.
The market's main focus was on the US stockpiles data, which showed that reserves of distillates, including heating fuel, fell by three million barrels to 133.3 million in the week ending February 9, according to the Department of Energy (DoE).
Analysts had expected a larger drop of four million amid freezing weather in the United States, the world's biggest energy consumer.
"The draw (in distillates) wasn't as big as some people thought and that brought the market down," said Phil Flynn, an analyst at Alaron Trading.
"The crude number was a little bit more bullish based on expectations (and) the gasoline numbers were bullish based on expectations," Flynn said.
The DoE report also showed that crude oil reserves fell by 600,000 barrels last week to 323.9 million barrels. That contrasted with market expectations of a gain of 600,000 barrels.
Gasoline inventories slumped by two million barrels last week to 225.2 million, against expectations of a rise of two million.
Oil prices had already weakened ahead of the data owing to profit-taking.
The declines came after prices had staged a rebound Tuesday, closing up more than a dollar in New York on news that the International Energy Agency (IEA) had raised its estimate for world oil demand this year.
Meanwhile the market showed little apparent alarm to a threat by Al-Qaeda in the Arabian Peninsula to oil facilities worldwide.
"Oil interests in all regions from which the United States benefits should be hit, not only in the Middle East," the group said in an article in its online monthly magazine, Sawt al-Jihad (the Voice of Jihad).
"The aim is to cut all its (US) imports (of oil) or reduce them by all means," it said.
"The targets among oil interests should include oil wells, export pipelines, loading platforms and tankers and all that could reduce the US access to oil."
It hinted that countries that could be targeted outside the Middle East included Canada, Mexico and Venezuela.
Canadian officials said they were monitoring against potential threats to the country's vast energy infrastructure.
burs-jjc/rl
AFP 142047 GMT 02 07
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