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Oil prices rebound in Asian trade
SINGAPORE
Petroleumworld.com 11 29 07
Oil prices rebounded in Asian trade Thursday after falling sharply overnight following a smaller-than-expected decline in US energy reserves, dealers said.
In afternoon trading New York's main contract, light sweet crude for January delivery, rose 1.42 dollars to 92.04 dollars from 90.62 dollars in late US trades Wednesday.
The contract had fallen 3.80 dollars overnight after the release of the US energy report. Last week, New York prices soared close to 100 dollars, touching an all-time high of 99.29 dollars.
Brent North Sea crude for January delivery was up 1.11 dollars to 90.92 dollars.
"After the very dramatic fall Wednesday, we've got a rebound," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
"Wednesday's tumble was really a knee-jerk reaction to the inventory report. Even though crude and distillates came down, the fall was smaller than expected."
The US Department of Energy (DoE) said US crude inventories fell by 400,000 barrels in the week to November 23, much smaller than analyst forecasts for a drop of 1.0 million barrels.
Stocks of distillates, which include heating fuel, shed only 100,000 barrels last week. The market forecast had been for a drop of 1.2 million.
Distillate stocks are closely watched in the run-up to the northern hemisphere winter, when demand for heating fuel tends to soar.
The DoE added that US refinery usage jumped to 89.4 percent of capacity, up 2.4 percentage points compared with a week earlier.Shum said prices could still resume their rise if the Organisation of Petroleum Exporting Countries (OPEC) decides at a meeting next Wednesday to leave current production levels untouched.
The decline in oil prices was largely due to speculation that OPEC will decide to raise production during its December 5 meeting in Abu Dhabi, analysts have said.
" The oil bull run is not necessarily over," Shum said. "If next week OPEC decides not to raise output, then crude oil futures may surge ahead and make another run towards 100 dollars a barrel."
Saudi Oil Minister Ali Al-Nuaimi has said that the world oil market is well supplied and that fundamentals do not support high oil prices.
Shum said the comments could be interpreted as meaning that OPEC's most influential member is not in favour of an output increase.
" The Saudis are really the de facto OPEC leader," Shum said.
Story from AFP 29 0639 GMT 11 07
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