Singapore: Oil prices levelled off in Asian trade on Thursday after dropping almost $2.50 in New York following news of an increase in US crude stockpiles, dealers said.
New York’s main oil futures contract, light sweet crude for August delivery, dipped 20 cents to $134.35 a barrel. It lost $2.45 to 134.55 on Wednesday at the New York Mercantile Exchange.
After five consecutive weeks of decline, US domestic crude stockpiles climbed by 800,000 barrels to 301.8 million, the US Department of Energy said. The consensus forecast was for a drop of 1.1 million barrels.
But analysts said there were still concerns about crude supplies which were supporting prices.
“The (US) report was bearish. However, pricing only pulled back moderately... simply because of supply-side concerns,” said Victor Shum of Purvin and Gertz energy consultancy in Singapore.
Brent North Sea crude for August fell 25 cents to $134.08 a barrel after sliding $2.13 to settle at 134.33 on Wednesday in London.
Oil prices have almost doubled over the past year, and hit record highs of close to $140 last week. Shum said the market can expect continued choppiness on a high price level.
“The bullish trend in oil remains intact,” he said.
Among the main concerns are unrest in major African producer Nigeria, and tensions between Israel and the world’s fourth-largest oil producer Iran.
Anglo-Dutch oil giant Shell said Tuesday it had resumed operations in a Nigerian oilfield that had been halted after an attack by militants last week cut output by 200,000 barrels a day.
Militants also blew up a key Nigerian supply pipeline run by Chevron late last week.
Adding to market jitters was Saudi Arabia’s announcement Wednesday that it had arrested more than 700 extremists in the past six months on suspicion of plotting attacks on oil installations.
Saudi Arabia, the world’s largest exporter, agreed at the weekend to raise its daily output by more than 200,000 barrels to 9.7 million.