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Oil prices mixed on surprise jump in US crude reserves
New York (AFP) Aug 22, 2007 World oil prices were mixed Wednesday as traders weighed a shock increase in crude reserves in the United States, the world's biggest energy consumer. New York's main oil futures contract, light sweet crude for delivery in October, slipped 31 cents to close at 69.26 dollars per barrel. The price had earlier fallen as low as 68.63 dollars, the lowest level since June 28. In London, the price of Brent North Sea crude for October delivery added one cent to settle at 68.70 dollars per barrel. The US Department of Energy (DoE) said Wednesday that American crude inventories rose by 1.9 million barrels in the week ended August 17. That beat analysts' consensus forecasts for a drop of 2.75 million barrels and snapped six straight weeks of declines. Fimat analyst Antoine Halff said the report showed US crude demand was dropping -- prompting some investment funds to exit the oil market. "Funds need liquidity to meet losses elsewhere," Halff said. "It's not completely surprising given the numbers -- the rise in crude and the fall in refinery runs show crude is not as much in demand." The DoE added that US gasoline, or petrol, reserves sank by 5.7 million barrels -- larger than market expectations of a drop of 800,000 barrels. "It was a mixed report, and we had mixed results, again there has been a lot of nervousness exhibited in the market, a lot of investors coming in and out," said John Kilduff, an analyst at MF Global. Veronica Smart, an analyst at the Energy Information Centre, said the market was more interested in crude oil than gasoline statistics. "Keep in mind the driving season is nearly over and the market's focus is shifting away from gasoline and to crude," she said. Oil prices found some support in Hurricane Dean's second landfall in Mexico, near the port city of Tuxpan, a transfer point for oil extracted offshore. Thousands of people were ordered Wednesday to evacuate threatened areas along the oil-rich Gulf of Mexico. The Petroleos de Mexico (PEMEX) state oil company had earlier evacuated all 18,000 personnel from its offshore oil installations in the Gulf of Mexico, causing a production drop of two million barrels day. Dealers said crude prices likely would be underpinned in the coming weeks because the Atlantic hurricane season had entered the peak months of the season, August through October. "There is a good chance that crude oil futures won't fall a lot further even though it crashed through the psychological barrier of 70 dollars," noted Victor Shum, an analyst with energy consultancy Purvin and Gertz. "Without a major storm threat or a major stock-market rally it will be tough to sustain a major rally," said Phil Flynn at Alaron Trading. "If another storm enters the Gulf and if Dean does more damage than expected to Mexican oil installations, then oil would recover sharply. But if not, we are going to be in a sell-the-rally mode." Community Email This Article Comment On This Article Related Links Powering The World in the 21st Century at Energy-Daily.com
Japan takes emergency step to meet power demand
Tokyo (AFP) Aug 22, 2007Japan's largest power company on Wednesday took rare emergency measures to address an imminent power shortage due to record heat and the suspension of an earthquake-hit nuclear plant. |
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