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Oil prices rally as US fuel reserves dive
AFP
NEW YORK
Petroleumworld.com 04 26 07Global crude oil prices jumped on Wednesday after news of another heavy fall in US gasoline reserves ahead of the peak season for motor travel, traders said.
New York's main oil futures contract, light sweet crude for delivery in June, gained 1.26 dollars to close at 65.84 dollars a barrel.
In London, the price of Brent North Sea crude for June delivery surged 1.41 dollars to 68.57 dollars a barrel.
The US Department of Energy said that gasoline or petrol reserves sank by 2.8 million barrels in the week ending April 20.
That marked the 11th consecutive weekly drop for gasoline inventories and compared with market expectations for a lighter fall of just 500,000 barrels.
"Today's energy stocks report was a step backward in readying for summertime demand in the US," said Altavest trader Tom Hartmann.
Traders are closely watching stock levels ahead of the US driving season, which begins in four weeks, when many Americans hit the highways for summer vacations.
The DoE added that crude oil inventories increased by 2.1 million barrels last week.
That confounded analysts' forecasts for a decrease of 1.5 million barrels.
The surprise gain in crude stockpiles was "not going to get anywhere near the attention that the gasoline figures will," according to Citigroup analyst Tim Evans.
Traders added that geopolitical concerns over key crude producers Iran and Nigeria were also lifting prices.
Sucden analyst Michael Davies noted: "In addition to robust demand for oil, uncertainty over Nigeria's future and controversy surrounding Iran's nuclear enrichment program continue to support the market."
A broad opposition coalition on Wednesday urged Nigerians to take to the streets peacefully next week to force the cancellation of flawed elections, slammed by foreign and domestic monitors alike, that were held this month.
The elections have renewed market jitters over Africa's biggest oil producer, where crude output has been slashed by around one-quarter owing to separatist unrest in the Niger Delta.
AFP 25 1928 GMT 04 07
Copyright© 2007 AFP. All Rights Reserved.
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