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Oil prices fall ahead of US inventories data
AFP
NEW YORK
Petroleumworld.com 06 27 07World oil prices fell Tuesday on expectations of a further rise in US crude stockpiles and news of increased output from key producer Nigeria, traders said.
New York's main oil futures contract, light sweet crude for delivery in August, slid 1.41 dollars to close at 67.77 dollars per barrel.
In London, Brent North Sea crude for August delivery slumped 1.19 dollars to settle at 70.17 dollars per barrel.
Traders were expecting on Wednesday to learn of another increase for crude US stocks when the American government updates the market with its latest weekly report.
Prices moved lower "on expectations for builds in all categories in tomorrow's inventory report," said John Kilduff at Man Financial.
"Recent pullbacks, though, have consistently attracted buyers. Apparently the market just can't keep crude oil down. There is still plenty to worry about besides weather and Nigeria."
Oil prices were also dampened Tuesday by news that US energy giant Chevron has resumed operations at its facility in southern Nigeria that was shut down two weeks ago because of community unrest.
"We have restored the output of 42,000 barrels of crude per day at the Abiteye flowstation," a company spokesman told AFP.
Around 20 youths occupied the facility, capable of producing 70,000 barrels per day (bpd), on June 17, cutting back 42,000 barrels in daily production.
Industry sources said the villagers were demanding jobs, money and social amenities from the US oil giant.
Last month, Chevron was forced to shut in 15,000 barrels of crude per day at its Funiwa oilfield in nearby Bayelsa state after the kidnapping of four Italians, an American and a Croatian. The men were later released.
Chevron is Nigeria's third-largest operator, accounting for some 360,000 bpd of the country's total output of 2.6 million barrels, a quarter of which is lost to unrest in the Niger delta.
Markets showed little reaction to news that ConocoPhillips and ExxonMobil decided to quit operations in Venezeula instead of agreeing to terms with President Hugo Chavez's government. Four other multinational oil companies signed accords in which Venezuela takes a majority stake in heavy crude upgrading projects along the Orinico River.
"It was not a surprise," said Antoine Halff at Fimat USA. "I don't think it will have any major effect immediately on production. But this indicates that production from Venezuela will continue to drop in the coming months."
AFP 26 1949 GMT 06 07
Copyright© 2007 AFP. All Rights Reserved.
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