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Oil prices slide after jump in US gasoline stocks
AFP
NEW YORK
Petroleumworld.com 05 10 07World oil prices fell Wednesday as government data showed a surge in US crude inventories and the first rise in 13 weeks for stockpiles of motor fuel, analysts said.
New York's main oil futures contract, light sweet crude for delivery in June, shed 71 cents to close at 61.55 dollars per barrel.
In London, the price of Brent North Sea crude for June delivery fell 34 cents to end at 65.20 dollars per barrel.
Prices recovered from earlier heavy falls prompted by the US Department of Energy's publication of its latest weekly snapshot of inventories.
"The report was bearish, showing the first (gasoline) supply increase in about three months," Altavest trader Tom Hartmann said.
The DoE said that stocks of gasoline (petrol) rose by 400,000 barrels in the week ended May 4. Analysts had forecast a rise of 150,000.
US gasoline stocks have been a major market focus in recent weeks in the run-up to the peak demand of the summer vacation driving season that begins at the end of May.
Elsewhere on Wednesday, the DoE said that crude inventories increased by 5.6 million barrels last week, when analysts had forecast a rise of only 875,000.
"From an economics point of view the entire report was bearish, with higher stocks in every major category," Citigroup analyst Tim Evans said.
John Kilduff of Man Financial agreed. "A report that shows an increase in gasoline inventories, rising refinery utilization rates, and another round of strong gasoline imports will represent a compelling bearish triumvirate for prices," he said.Aside from the inventory data, traders monitored ongoing unrest in Nigeria.
On Wednesday, Nigerian officials said gunmen had seized four US oil workers in southern Nigeria, adding to a list of dozens of foreigners taken hostage in recent weeks.
The men were on a construction vessel off the oil-rich southern coast, the DLB Cheyenne, which was attacked late Tuesday by almost 40 gunmen on six small boats, an industry source said.
" The market remains well supported by continuing violence in Nigeria," Sucden analyst Michael Davies said.
Nigeria is the world's sixth-biggest oil exporter but its output is being severely hit by frequent kidnappings of foreign oil workers and attacks on pipelines.
Militant attacks on oil installations in Nigeria, Africa's largest producer of crude, had pushed crude prices higher on Tuesday.
"The stakes over the situation appear to be on the rise, and may become a significant factor that reignites bullish sentiment," said Man Financial's Kilduff.
AFP 09 1942 GMT 05 07
Copyright© 2007 AFP. All Rights Reserved.
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