Oil prices near $117 a barrel

Oil prices near $117 a barrel
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First Published: Thu, Aug 21 2008. 09 22 AM IST
Updated: Thu, Aug 21 2008. 09 22 AM IST
AFP
Singapore: Oil prices rose Thursday after a larger-than-expected decline in US petrol stocks but gains were likely to be limited, analysts said.
New York’s main oil futures contract, light sweet crude for October delivery, rose $1.01 to $116.57 barrel.
The September contract expired at the close in New York Wednesday at $114.98 a barrel.
Brent North Sea crude for October delivery was 89 cents higher Thursday at $115.25.
The increases followed the US Department of Energy’s (DoE’s) report that crude oil stockpiles in the United States climbed 9.4 million barrels in the week ending 15 August. Analysts had forecast a much smaller gain of 800,000 barrels.
The DoE said US gasoline, or petrol, reserves slumped 6.2 million barrels last week, compared with market expectations for a drop of 2.4 million barrels.
“People are looking at the gasoline inventory drawdown,” said Tetsu Emori, fund manager at Astmax asset management in Tokyo.
Gasoline stocks are closely watched at this time of year when American motorists are on the highways for their summer holidays, typically pushing up demand for gasoline.
But analysts say the overall demand for oil in the US, the world’s biggest energy consumer, has fallen heavily and there are fears of slowing demand elsewhere.
World oil prices have tumbled sharply from record highs above $147 in July as economic stagnation dents global demand for energy.
Prices broke through the $100 level at the start of the year and Emori said demand worries could help pull oil back towards a range of $90 - $105 by year’s end.
“I think the price is going to be heading to the downside for the medium term, to the end of the year,” he said.
Traders said interest was rising about the Organisation of the Petroleum Exporting Countries’ (OPEC) position at its September meeting. OPEC, which is steered by Saudi Arabia, produces about 40% of the world’s crude.
A leading British energy consultancy, CGES, said Monday that OPEC might decide to cut output next month should the price of crude fall below $100.
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First Published: Thu, Aug 21 2008. 09 22 AM IST
More Topics: Commodities | Energy | Oil | Brent Crude | Nymex |