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Oil prices consolidate after shock supply data
AFP
NEW YORK
Petroleumworld.com 03 09 07
World oil prices drifted lower Thursday as traders consolidated gains made on the back of a surprisingly weak report on petroleum stockpiles in major consumer the United States.
New York's main oil futures contract, light sweet crude for delivery in April, fell 18 cents to close at 61.64 dollars per barrel.
The price of Brent North Sea crude for April delivery eased 17 cents to settle at 62.33 dollars per barrel. Earlier Thursday Brent had reached 62.84 dollars -- the highest level since December 26 last year.
Crude futures had started Thursday a little firmer, "extending gains from the previous session," said Michael Davies, an analyst at the Sucden brokerage in London.
Oil prices had leapt by more than a dollar on Wednesday after the US Department of Energy (DoE) revealed that American stocks of crude oil, distillates and gasoline (petrol) tumbled in the week to March 2.
Davies added: "The market remains tight and oil futures seemed to (have) recovered, following last week's sell off in commodities, resulting from a major correction in global equities markets affecting investors worldwide."
Some analysts were puzzled by the data while others said US supplies remained well above normal levels.
Phil Flynn at Alaron Trading said the supply data was "something out of this world."
"That was a shock because most traders were actually looking for supplies to increase ... Where did all that oil go? Was there a huge surge of demand? Did oil sipping aliens come down from outer space and suck down our crude supply?"
One answer, Flynn said is that the oil was "lost in the fog," due to the shutdown of the Houston shipping channel, but that this would not account for the full amount of the drawdown.
"So the bottom line is fog or no fog the number was bullish for crude even if we see the crude supply surge in the coming weeks," he said.
Crude prices had slumped Monday as traders sought to limit their investment exposure because of volatile financial markets concerned about a global economic slowdown, some analysts said.
"The market is holding steady at the 61 to 62 dollars level," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
He added: "It has recovered primarily driven by the bullish US inventories report and also the earlier recovery in the global stock markets."
According to the weekly DoE report, US crude oil inventories fell by 4.8 million barrels to total 324.2 million barrels. Analysts had expected a rise in the crude levels of 1.8 million barrels.
AFP 08 2039 GMT 03 07
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