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Oil prices ease before US rate call, stockpiles data
LONDON
Petroleumworld.com, April 30, 2008
Oil prices fell slightly on Wednesday ahead of a decision on US interest rates and energy inventory data, traders said.
Oil prices had closed more than three dollars lower on Tuesday as the US currency recovered and because of easing concerns over tight energy supplies, they added.
New York's main oil futures contract, light sweet crude for June delivery, fell 46 cents to 115.17 dollars per barrel on Wednesday. New York crude had struck a record high 119.93 dollars on Monday.
London's Brent North Sea crude for June dipped 40 cents to 113.03 dollars. The contract had hit an all-time peak of 117.56 last Friday.
"Oil prices were lower, extending losses from yesterday (Tuesday) amid a stronger dollar," said Sucden analyst Andrey Kryuchenkov.
"Normally, dollar denominated commodities benefit from the broad weakness in the dollar, as it makes them relatively cheaper for foreign investors. So it is only natural that a firmer dollar would have an inverse impact on commodities."
The dollar climbed against major currencies on Wednesday ahead of a widely expected cut to US interest rates, dealers said, with sentiment on the US economic outlook improving.
The US Federal Reserve may also hint that it has come to the end of its monetary easing cycle, which would further boost the dollar.
Analysts said the pullback in oil prices from Monday's gains was due in part to the end of a two-day strike at the Grangemouth refinery in Scotland.
The stoppage, which ended Tuesday, closed a pipeline which supplies 40 percent of Britain's oil and gas.
As oil prices slumped, US President George W. Bush said Tuesday that he would not dip into the US strategic oil reserve, saying such action would not help curb prices.
Over the past two weeks, oil prices have smashed through a series of record highs, sparking widespread international concern among consumer nations.
Kuwaiti Oil Minister Mohammad al-Olaim said Wednesday that the Organisation of Petroleum Exporting Countries (OPEC) may hold an extraordinary meeting on oil prices before a scheduled conference in September.
"If there is any requirement for a meeting, we will not hesitate to meet," Olaim said.
"OPEC is always looking for the stability of the oil market," the minister told reporters on the sidelines of the fourth World Islamic Economic Forum being hosted by Kuwait.
"But it is not the fundamentals (of supply and demand) that are driving the prices (higher) ... The prices are led by other reasons -- speculation, limitation of refinery (capacity) and the weakening of the dollar," the minister added.
Meanwhile, traders were awaiting the latest weekly snapshot of US energy inventories, to be published later Wednesday.
Story from AFP
AFP 30 1201 GMT 04 08
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