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Wednesday, February 15, 2006
World crude prices drop on report of more supply
SINGAPORE - Oil prices extended declines yesterday amid expectations that a midweek United States supply report will show higher crude inventories.
Light, sweet crude for March delivery fell 29 cents to $60.95 a barrel in the Asian electronic trading on the New York Mercantile Exchange.
The contract lost 60 cents last Monday to close at $61.24 a barrel, the lowest settlement this year.
April Brent futures on London’s ICE fell 21 cents to $60.41 a barrel.
Climbing stock
Traders predicted the US Energy Department’s weekly petroleum supply snapshot due today would likely show climbing oil stocks for the seventh straight week.
US commercial crude oil stocks - already well above the average level for this time of the year — are expected to gain another one million barrels in inventory data, according to the average of 10 analysts’ estimates in a survey conducted last Monday by Dow Jones Newswires.
Dispute
Traders remained concerned about the international dispute over Iran’s nuclear activities and to a lesser extent unrest in Nigeria, but oil futures have slipped since Friday last week on reports of lagging demand and bulging supplies.
The International Energy Agency (IEA), the Paris-based energy watchdog, reported falling demand due to high costs of crude.
“The price is completely oversold and has reached quite an important level now - $60 a barrel is a psychological support level, if we get more bearish information we may see another huge decline to $55,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures.
Emori said traders were watching gasoline demand and preparing to accumulate stocks as US refineries started seasonal maintenance over the next three months, which is expected to limit supply of the fuel ahead of the peak demand summer driving season.
Nymex gasoline fell 0.52 cent to $1.426 a gallon (3.8 liters) as energy analysts estimated an average rise in gasoline stocks of
1.5 million barrels last week, marking seven straight weeks of increases.
Distillate stocks, which include heating oil and diesel fuel, are expected to fall 500,000 barrels in government and industry petroleum-inventory data due today. Heating oil inched down marginally to $1.6385 a gallon. (AP)
For Bisaya stories from Cebu. Click here. (February 15, 2006 issue)
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