Oil Rises Before Report Expected to Show U.S. Stockpiles Fell
By Christian Schmollinger
Jan. 17 (Bloomberg) -- Oil rose from a 19-month low in New York before a report tomorrow that's expected to show U.S. crude supplies fell for an eighth week, underlining a global drop in inventories.
U.S. oil stockpiles probably declined 900,000 barrels last week, according to the median estimate of a Bloomberg News survey of nine analysts. Inventories held 314.7 million barrels on Jan. 5, 2.8 percent less than a year ago. Commercial stocks in Japan, the second-largest importer, have fallen 3.5 percent from Dec. 30, according to the Petroleum Association of Japan.
``Crude demand seems to have stood up pretty well,'' said Gavin Wendt, senior resources analyst at asset manager Fat Prophets in Sydney. ``That indicates the fundamentals are still in place and are positive.''
Crude oil for February delivery rose as much as 37 cents, or 0.7 percent, to $51.58 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $51.53 at 1:13 p.m. in Singapore.
The contract plunged $1.78, or 3.4 percent, to $51.21 yesterday after Saudi Oil Minister Ali al-Naimi said OPEC's largest producer didn't support an emergency meeting to consider further output cuts. Prices, down 16 percent this year, reached $50.53, the lowest intraday price since May 25, 2005.
The Organization of Petroleum Exporting Countries must wait to assess the effect of supply curbs due on Feb. 1 before cutting output again, al-Naimi said yesterday in New Delhi.
In London, Brent crude oil for March settlement gained as much as 29 cents, or 0.6 percent, to $51.91 a barrel in electronic trading on the ICE Futures exchange.
Market Healthier
``I believe these measures are working very well,'' al- Naimi said. ``We don't believe we need supply cuts at a time when the market is looking healthier''
Saudi Arabia is the biggest producer in OPEC, which pumps about 40 percent of the world's oil. The group agreed last month to cut production by 500,000 barrels a day beginning Feb. 1. That followed an October agreement in Doha, Qatar, to cut output by 1.2 million barrels a day.
OPEC's cuts since Nov. 1 removed almost 100 million barrels from the global oil market in the fourth quarter, al-Naimi said.
The 10 OPEC members that adhere to output quotas pumped 385,000 barrels a day more oil than their agreed target last month, according to Bloomberg data. Nigeria and Venezuela were the biggest violators, exceeding their targets by a total of 220,000 barrels a day.
Average U.S. oil imports fell to 9.42 million barrels a day in the four weeks ended Jan. 4, 5.7 percent less than the same period a year earlier, the U.S. Energy Department said last week.
Products Gain
U.S. gasoline stockpiles probably gained 2.5 million barrels last week, based on the median estimate from the analyst survey. Inventories held 213.3 million barrels a week earlier, a 13-week high and 1.5 percent more than a year earlier.
Distillate supplies, including heating oil and diesel, probably gained 1.5 million barrels. Stockpiles held 141 million barrels on Jan. 5, or 3.4 percent more than a year earlier.
``The drawdown in crude oil could be a supporting factor for the market,'' said Tetsu Emori, chief commodities strategist for Mitsui Bussan Futures Ltd. in Tokyo. ``But as long as the oil products stocks are high, it will not be as strong a factor.''
In Nigeria, Africa's largest oil producer, an attack near the Bonny Island oil terminal killed a Dutch national and three Nigerians, Agence France-Presse reported yesterday.
Oil production in Nigeria has been cut by militant attacks on oil installations during the last year.
At least six others were injured in the attack on the boat, the news agency said.
To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net .
Last Updated: January 17, 2007 00:22 EST |
