Oil steady, weighs demand fears vs supply risks

Oil steady, weighs demand fears vs supply risks
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First Published: Tue, Jul 15 2008. 08 54 AM IST
Updated: Tue, Jul 15 2008. 08 54 AM IST
Reuters
Singapore: Oil was steady under $145 on Tuesday, as dealers weighed the impact of high oil prices on global demand against fresh threats of supply disruptions in Nigeria, Brazil and Iran.
US crude was 30 cents lower at $144.88 a barrel at 0131 GMT, while London Brent crude fell 32 cents to $143.60 a barrel.
Traders remained concerned about possible supply disruptions from OPEC member Nigeria -- where militants in the oil producing region abandoned a cease-fire -- and from Iran amid tensions with Israel and the West over Tehran’s nuclear programme.
Oil prices have risen more than seven-fold since 2002 on growing demand from emerging nations like China and rising cash inflows into commodities from investors seeking to hedge against inflation and the weak dollar.
The dollar steadied near a record low against the euro on Tuesday, after rising on the US announcement of an emergency plan to support two struggling top mortgage lenders, but worries about economic growth and the financial system capped its rise.
Rising fuel costs have sparked global protests and cut US fuel demand during the typical peak summer gasoline season, but robust growth in emerging economies continues to keep their appetite to consume high.
On Monday, US President George W. Bush lifted a presidential ban on offshore drilling to boost domestic supplies and combat soaring energy prices. Analysts said the plan would take a decade to bring real results and offer little short-term relief.
A congressional ban on offshore drilling also remains in place, and Senate Democratic Leader Harry Reid later on Monday rejected Bush’s call to lift the moratorium.
Markets were also eyeing a low-pressure system about 1,300 miles east of the Lesser Antilles that could develop into a tropical depression.
A Reuters poll ahead of weekly US government inventory data forecast that US crude stocks fell 1.2 million barrels last week. US gasoline inventories were seen down 300,000 barrels while distillate stocks were seen up 1.9 million barrels.
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First Published: Tue, Jul 15 2008. 08 54 AM IST
More Topics: Markets | oil | crude | prices | offshore drilling |