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Oil holds above $81 on winter stocks worries

Oil holds above $81 on winter stocks worries
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First Published: Fri, Oct 05 2007. 10 08 AM IST
Updated: Fri, Oct 05 2007. 10 08 AM IST
Seoul, 5 October Oil held above $81 a barrel today, clinging to its first gains in five days after data showing unexpectedly low US distillate and natural gas stocks stirred concern about peak winter supplies.
US crude fell 18 cents to $81.26 a barrel by 0259 GMT after rallying $1.50 on Thursday (4 October), its first rise in a week. Brent crude lost 32 cents to $78.65 a barrel.
Thursday’s gains were fuelled by data showing US natural gas stocks rose less than expected last week, expanding by 57 billion cubic feet instead of the 67 bcf expected by analysts, according to the Energy Information Administration.
That followed data on Wednesday that showed distillate supplies, including heating oil, dropped by 1.2 million barrels last week, about 9% below last year’s average.
Taken together, the data painted a picture of tighter heating fuel supplies ahead of winter, although forecasters said separately that they expected another warmer than average winter this year.
A resumption in the dollar’s decline on 4 October, snapping a three-day rally, also aided oil. The dollar steadied just above a record low against the euro on Friday as dealers await September US payrolls data, expected to keep the Federal Reserve on track to cut interest rates later this month.
“Crude prices might gain further as the weaker dollar could encourage funds to use oil as a hedge,” said Koo Ja-kwon, crude analyst at Korea National Oil Corp (KNOC)
Oil has traded near the $80 mark for about three weeks despite OPEC’s agreement on Sept. 11 to boost output by 500,000 barrels per day (bpd) from 1 November.
ConocoPhillips and Valero Energy Corp said on Thursday their Los Angeles-area refineries were expected to resume normal operations during the week after being shut down Wednesday morning by a power outage.
Both Valero’s 135,000 barrels per day (bpd) refinery and Conoco’s 139,000 bpd refinery on Thursday were working through processes to restart from cold shutdowns.
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First Published: Fri, Oct 05 2007. 10 08 AM IST