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.