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Oil prices higher in Asia

Oil prices higher in Asia
AFP
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First Published: Wed, Feb 13 2008. 11 43 AM IST
Updated: Wed, Feb 13 2008. 11 43 AM IST
Singapore: World oil prices rose in Asian trade on Wednesday after Venezuela’s state petroleum company PDVSA said it suspended oil supplies to US energy giant ExxonMobil.
In morning trade, New York’s main contract, light sweet crude for delivery in March, rose 25 cents to $93.03 per barrel.
The contract fell 81 cents to $92.78 a barrel during floor trading on Tuesday at the New York Mercantile Exchange.
Brent North Sea crude for March delivery rose 30 cents to $93.16 a barrel after settling 67 cents lower at $92.86 on Tuesday in London.
Venezuela’s move came after ExxonMobil, the world’s biggest energy company, secured international court orders freezing up to $12 billion in PDVSA assets.
The court orders were issued as part of an international arbitration sought by ExxonMobil to gain compensation for the leftist Venezuelan government’s nationalisation of key oil fields in the Orinoco basin.
“The move was not completely surprising so there will not be a huge disruption to prices,” said Steve Rowles, an analyst at CFC Seymour securities in Hong Kong.
The cut in supply would temporarily push prices higher, said Rowles, who added that Venezuela’s oil market has more to lose from cutting its supplies to the US.
In a statement, the Venezuelan company cited “judicial-economic aggression” by ExxonMobil as the reason for its action, which it described as an act of “reciprocity.”
Crude prices soared Monday after weekend threats by Venezuelan President Hugo Chavez to cut oil deliveries to the United States.
The market was also looking to the weekly US crude stockpiles report due later Wednesday. Dealers expected a fifth straight increase in crude stockpiles.
The United States has embarked on a period of reserves rebuilding, a trend that since last month has dampened fears of insufficient supply, particularly during the Northern hemisphere winter.
“The increase in stockpiles at this time is just part of the yearly cycle,” said Rowles.
However, the market remains on edge over political and supply risks, as well as signs of slowing economic growth in the US that could dent demand.
“Geopolitical uncertainty and potential supply disruption fears have provided a strong lift to prices, acting to have temporarily pushed aside sagging demand concerns from the poor economic outlook,” Mike Fitzpatrick of MF Global said earlier.
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First Published: Wed, Feb 13 2008. 11 43 AM IST
More Topics: Oil | Crude | Commodities | Venezuela | US |