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Global oil prices drop on easing gasoline supply concerns
AFP
NEW YORK
Petroleumworld.com 05 30 07World oil prices fell sharply Tuesday as US refineries began restarting following disruptions and after an oil sector strike ended in Nigeria, traders said.
New York's main oil futures contract, light sweet crude for delivery in July, slumped 2.05 dollars to finish at 63.15 dollars a barrel. US markets were closed Monday due to a US public holiday.
In London, Brent North Sea crude for July delivery lost 1.58 dollars to close at 68.13 dollars a barrel.
Traders were awaiting weekly US government snapshot of oil inventories, particularly the gasoline (petrol) data. Below-average levels of the motor fuel have sent crude prices surging ahead of the US summer driving season that began last weekend.
Several oil companies, such as ConocoPhillips, Citgo and Valero, announced that problems at their refineries in the United States had been resolved.
And BP's Prudhoe Bay oil field in Alaska was back to operating at full capacity after a pipeline leak last week.
But analysts said the refinery problems would continue to weigh on supply.
"Despite some refiners resuming production, the huge deficit in gasoline stocks is unlikely to be resolved anytime soon," said Mike Fitzpatrick of Man Financial. "Last week's jump in utilization rates indicates refiners are doing all they can to catch up, but they are seriously behind last year."
Meanwhile, a key consumer confidence indicator of the world's biggest energy consumer showed Americans shrugged off record-high motor fuel prices in May and anticipated a brighter economic future.
"High gasoline prices may hurt, but apparently not that much," said Joel Naroff of Naroff Economic Advisors.
"Even after having declined for two straight months already, it still had been expected that household concerns about energy would depress confidence further."
In Nigeria, the world's sixth biggest exporter of crude, President Umaru Yar'Adua used his inaugural address to call for an immediate cessation of hostilities in the African country's restive southern oil region.
The new leader assured Nigerians that he would "find a way to achieve peace and justice" in the Delta region, where about 180 foreigners -- mostly oil workers -- have been taken hostage by armed groups in the past 18 months.
On Saturday, Nigerian oil workers called off a two-day strike, helping ease supply concerns.
Man Financial's Fitzpatrick pointed out that despite the resolution of that strike, nearly 25 percent of Nigerian oil production remained shut in and "any new incident will keep the outlook tight for world oil supplies."
AFP 29 1949 GMT 05 07
Copyright© 2007 AFP. All Rights Reserved.
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