Oil rebounds as U.S. crude stocks show surprise fall<\/p>\n
LONDON (Reuters): World oil prices rebounded on Wednesday
\nfollowing a surprise drop in U.S. crude inventories which pointed
\nto tighter supply ahead of the northern winter.<\/p>\n
London futures for Brent Blend crude oil jumped by 28 cents to
\nUS$24.97 per barrel by midday, recouping some of the 47 cents
\nlost in the first two days of the week.<\/p>\n
Figures from the American Petroleum Institute (API) released
\nafter market close Tuesday showed crude oil stocks in the United
\nStates fell 1.1 percent to 312 million barrels in the week to
\nJuly 27.<\/p>\n
Oil traders had expected them to rise, and the data
\ncounteracted recent bearish pressure from slowing growth in the
\nUnited States, the world's largest oil consumer.<\/p>\n
U.S. crude inventories are still 9.5 percent above last year,
\ndespite the latest fall, and the news sharpened attention on the
\nrecent decision by the OPEC cartel to cut production by four
\npercent from September 1, just as the northern hemisphere heads
\ninto winter.<\/p>\n
\"The drop in crude oil supplies compounds the importance of
\nthe million barrel per day OPEC cut,\" said Tim Evans, senior
\nmarket analyst at IFR Pegasus. \"This means we'll have less of a
\ncushion to handle it.\"<\/p>\n
The API data was a shot in the arm to flagging oil markets,
\nwhich have been trending downwards since last week as concerns
\nover sluggish demand for petroleum have outweighed the bullish
\nimpact from OPEC's latest supply deal.<\/p>\n
Last week, the Organization of the Petroleum Exporting
\nCountries agreed to its third output reduction this year, which
\nwill leave group production some 13 percent, or 3.5 million
\nbarrels per day, below levels at the beginning of 2001.<\/p>\n
The latest cut began to filter into the market on Wednesday
\nwhen the United Arab Emirates informed term customers in Japan
\nand South Korea, two of Asia's biggest crude buyers, that it
\nwould supply five percent less of one of its grades in September.<\/p>\n
OPEC President Chakib Khelil said on Tuesday that the cartel
\ncould increase production by January if the economy in the United
\nStates, the world's biggest oil consumer, started to show signs
\nof recovery from the current downturn.<\/p>\n
OPEC is scheduled to meet at the end of September, but Khelil,
\nwho is also Algerian oil minister, said it was unlikely there
\nwould be enough data by then to gauge any upswing in the U.S.
\neconomy or the severity of the oncoming winter.<\/p>",
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"sponsor": "Okusi Associates",
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