U.S. crude stock drop boosts Asian oil prices

U.S. crude stock drop boosts Asian oil prices

SINGAPORE (Reuters): Crude oil prices in Asia jumped on
Wednesday, reacting to oil data that showed a large decline in
U.S. crude stocks.

At 0620 GMT, November U.S. crude futures on the after-hours
ACCESS traded 31 cents per barrel stronger from its close in New
York at US$24.64.

In the overnight New York market, the contract had closed at
$24.33, falling 28 cents from the previous day.

Total crude stocks in the United States, the world's largest
oil consumer, fell by 3.68 million barrels in the week that ended
September 24, according to figures released by the American
Petroleum Institute (API) late on Tuesday.

The API numbers showed U.S. crude stocks to be around 305
million barrels currently, the lowest level in almost three
years.

U.S. crude stocks last fell below 300 million barrels in early
1997, when New York crude futures prices were above $26 per
barrel.

"They (API) were really positive numbers, much more positive
than we expected," said a broker with E.D. & F. Man in New York.

In London and New York overnight trade, prices had slipped
after Iraq said it would continue to export oil even after it
reaches the ceiling of $5.26 billion allowed under the current
phase of the U.N. "oil-for-food" deal.

"We will continue to produce and export as much as we can
within our capabilities independent of any other measure," Iraqi
Oil Minister Amir Muhammad Rasheed said on Tuesday.

Iraq is expected to exceed its ceiling by October 8, ahead of
the November 20 expiry of the current program, U.N figures
showed.

But the latest API stocks data led to a price rebound in Asian
day, keeping intact the price rally that started in March after
OPEC agreed to cut production.

At its meeting in Vienna last week, OPEC agreed to maintain
the output cuts at least until March next year.

Analysts have predicted a continued price rise as the OPEC
output cuts meet northern hemisphere winter demand in the fourth
quarter.

Oil prices have more than doubled since the start of the year,
when U.S crude prices fell to a 12-year low of $10.35 in December
1998.

"It (U.S. crude prices) is not likely to reach $25 in today's
ACCESS trade, but it's very possible tomorrow," the E.D. & F. Man
broker said.

U.S. crude prices last traded at $25 per barrel in late
January, 1997.