Oil prices in Asia regain some losses
Oil prices in Asia regain some losses
SINGAPORE (Reuters): Crude prices in Asia on Thursday bounced higher on bargain-hunting, regaining some of the losses made in the New York market, where prices dropped sharply on speculation of an OPEC output rise soon.
U.S. stocks data, which showed a fall in both crude and gasoline stocks, as the nation heads into summer, helped shore up oil prices.
July U.S. light crude futures in after-hours ACCESS was at $29.14 per barrel by 0810 GMT, rising 13 cents from its New York settlement.
In New York, the contract dropped $1.34, to end at $29.01.
Latest data from the American Petroleum Institute (API), released late on Tuesday, showed that crude stocks in the week ended May 26 fell 1.7 million barrels
The data also showed reformulated gasoline stocks falling 1.3 million barrels in the same week, which could add to shortage concerns, as the U.S. launches the new, cleaner reformulated RFG 2 gasoline grade in nearly a third of its cities on Thursday.
Concerns over possible supply shortages of RFG 2 had led NYMEX gasoline futures prices to surge to a post Gulf War high of $1.09 a gallon on Wednesday.
But some analysts said gasoline service stations had probably been stocking up, drawing down storage at tank farms which was reflected in the stock numbers.
There was also speculation that OPEC would look at increasing production soon, as the 20-day average of its basket of seven crudes inch closer to the $28 limit. This had triggered the sell- off in New York which pulled prices there sharply lower.
OPEC ministers have said they were agreed on a mechanism whereby they would raise or lower output by 500,000 barrels per day (bpd), if the 20-day average of OPEC's basket of crudes strays from a $22-$28 per barrel price band.
The 20-day average was at $27.31 on Tuesday, while the daily average of the crude basket was $28.46.
Iran's OPEC governor Hossein Kazempour Ardebili said on Wednesday oil market volatility might push the 20-day average of OPEC's crude basket above $28 before the cartel meets on June 21.
He said Iran would take its share of any increase in OPEC output triggered by a move of the 20-day average out of the $22- $28 range.
"We hope prices will remain within the $22-$28 price range but if not, Iran would take its share of any automatic 500,000 bpd increase once $28 is breached," he told reporters in London.
But U.S. Secretary Bill Richardson on Wednesday declined to comment on the speculation that OPEC would increase output.
"I don't want to comment because I don't want to appear to be trying to influence OPEC," Richardson told Reuters, after a speech in Cleveland.