Oil prices push US$59 a barrel after distillate stocks report
Oil prices push US$59 a barrel after distillate stocks report
Associated Press, Singapore
Crude oil futures gained in Asian trading on Thursday following the release of a U.S. government weekly report which showed a larger-than-expected drop in distillate stocks.
The market was largely unaffected by Royal Dutch Shell PLC's Thursday announcement it would declare a force majeure on its light, sweet crude exports from Nigeria after attackers set off dynamite at a pipeline two days ago. That phrase means Shell will be exempt from not fulfilling its contract obligations due to conditions out of its control.
Light, sweet crude for February delivery on the New York Mercantile Exchange rose 14 U.S.cents to US$58.93 a barrel in mid-afternoon electronic trading. The contract settled Wednesday at $58.56 a barrel, up 47 U.S.cents.
February Brent futures on London's ICE rose 20 U.S.cents to $56.92 a barrel.
Heating oil advanced 0.16 U.S.cent to $1.7580 a gallon (3.8 liters), while gasoline rose 1.06 U.S.cents to $1.5470 a gallon. Natural gas fell 17.1 U.S.cents to $14.100 per 1,000 cubic feet.
Tuesday's blast at Shell's oil pipeline in the Niger Delta has resulted in the shut-in of 180,000 barrels a day of crude oil and closed three flow stations that feed into the Bonny export terminal - which is used to export much of Nigeria's crude, a good portion of which goes to the U.S.
Unrest in key producers Nigeria, Saudi Arabia and Iraq was partly blamed for the price rise in 2004 when analysts had said any disruption to supply could affect the world's already thin buffer of spare crude.
Helping to lift prices was Wednesday's U.S. government report saying supplies of distillate fuels, which include heating oil and diesel oil, fell by 2.8 million barrels last week, while stocks of crude rose by a surprise 1.3 million barrels to 322.5 million barrels.
Gasoline inventories declined by 300,000 barrels to 204.1 million barrels, the Energy Information Administration said.
The report sparked mixed reactions from traders in the previous session, with prices initially dipping in response to the build in crude stocks before turning around and advancing on the drawdown in gasoline and distillate stocks, which came amid a decline in production and record oil demand.
The data showed strong demand for heating oil, as lower-than- normal temperatures in the U.S. Northeast, the world's largest market for that kind of fuel, led to an increased use of the distillate in recent weeks.