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World oil prices soared Thursday, breaching 71 dollars in London
AFP
NEW YORK
Petroleumworld.com 06 15 07World oil prices soared Thursday, breaching 71 dollars in London, after data showed no increase in US gasoline stockpiles as the peak driving season in North America begins.
New York's main oil futures contract, light sweet crude for delivery in July, leapt 1.39 dollars to close at 67.65 dollars per barrel.
In London, Brent North Sea crude for July delivery jumped 1.02 dollars to settle at 70.96 dollars per barrel after topping 71 dollars in intraday trade.
Crude prices had surged higher Wednesday after the US Department of Energy (DoE) said US motor fuel inventories were flat at 201.5 million barrels in the week ending June 8, well below the average range for this time of year and ending a five-week streak of gains.
Market expectations had been for a rise of 1.6 million barrels.
"The market was expecting a very bearish report (from the DoE) which did not materialise," Sucden analyst Michael Davies said in London on Thursday.
Oil prices are also being supported by a decline in refinery utilization for the second consecutive week.
"Yesterday's inventory reports indicate that refineries are not building as much of a cushion in summer supplies, as was hoped over the last three weeks," said Mike Fitzpatrick, an analyst at Man Financial.
He suggested a rally in US equities Wednesday also had helped to improve the energy demand outlook.
Gasoline supplies remain in focus amid the US summer vacation driving season when demand for motor fuel traditionally peaks.
Elsewhere in the market, OPEC held steady its 2007 estimate of world oil demand and brushed aside calls from consuming countries that it boost supply in a bid to lower prices.
"Market fundamentals do not indicate that additional supply is necessary at this time," the Organization of the Petroleum Exporting Countries said in its monthly report, adding the cartel "stands ready to relieve any emerging tightness in the crude oil market".
OPEC said it expected global oil demand to increase 1.5 percent to 85.6 million barrels per day in 2007, maintaining recent estimates.
US demand rose 2.3 percent in May from April, driven by heavy demand for gasoline.
Geopolitical concerns over key crude producer Iran persisted, traders said.
UN nuclear chief Mohamed ElBaradei on Thursday urged Iran to halt an expansion of uranium enrichment to defuse the international crisis over Western concerns that Tehran is developing atomic weapons.
Iran, the world's fourth-biggest producer of crude, says its nuclear program is for civilian purposes and insists it will not suspend uranium enrichment.
The Iranian government has threatened to further reduce cooperation with the International Atomic Energy Agency (IAEA) if new United Nations sanctions are ordered.
The UN Security Council has imposed two sets of sanctions since December in a bid to get Iran to halt uranium enrichment -- which can make fuel for reactors or for a bomb -- and to cooperate with an IAEA investigation over concerns Iran seeks nuclear weapons.
On another geopolitical risk front, Nigeria, Africa's biggest oil producer, released a prominent separatist leader held on treason charges since 2005.
The detention of the leader had sparked a series of kidnappings in the oil-rich Niger Delta. Analysts said the release could be a first step toward ending strife in the Delta that has cut oil production by a quarter.
AFP 14 2029 GMT 06 07
Copyright© 2007 AFP. All Rights Reserved.
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