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Oil higher in Asia as credit worries ease

Oil higher in Asia as credit worries ease
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First Published: Tue, Aug 28 2007. 02 58 PM IST
Updated: Tue, Aug 28 2007. 02 58 PM IST
Agencies
Late afternoon
Singapore: World oil prices traded slightly higher in Asia on 28 August after sharp gains in New York as fears receded about an economic crisis from US credit woes, dealers said.
At 2:25pm (1155 IST), New York’s main oil futures contract, light sweet crude for delivery in October, was 7 cents higher at $72.04 a barrel from $71.97 in late US trades the previous day.
Brent North Sea crude for October delivery was 14 cents higher at $71.09 a barrel.
Oil markets were rattled in recent weeks by a lingering US housing crisis and fears it could crimp growth in the world’s biggest oil-consuming nation.
An industry survey on 27 August showed that sales of existing US homes fell slightly in July to the lowest level in nearly five years as credit tightened amid rising foreclosures.
But the crude market was unfazed.
“Some of the fears... have sort of gone out of the oil market,” said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia in Sydney.
Morning
Singapore: Oil prices rose Tuesday, 28 August, following reports of problems at two US refineries and amid expectations a midweek US petroleum stocks report will show gasoline supplies fell again.
Light, sweet crude for October delivery added 13 cents to $72.10 a barrel in Asian electronic trading on the New York Mercantile Exchange, mid-morning in Singapore. The contract rose 88 cents to $71.97 a barrel Monday in the US.
Nymex gasoline prices added 0.37 cent to $2.043 a gallon in electronic trading on continued concerns about the impact of a mid-August fire at Chevron Corp.’s 330,000-barrel-per-day refinery at Pascagoula, Mississippi. Gasoline prices rose 5.79 cents during the previous day session on the same worries.
“There are reports of refinery glitches coming up at a few locations in the US and so gasoline futures prices have gone up and the gasoline market has also driven up the crude oil market,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
“Crude really derives all its value from the products that can be made from it. So when product prices go up, there is a knock-on effect on crude.”
Trade media reports late last week said Chevron had canceled a 550,000-barrel Venezuelan crude order. The company has declined to verify that report, but did say, “we are working closely with our crude suppliers and expect some crude shipments may be canceled or rerouted to other refineries in our global network.”
Gasoline prices were also boosted by talk that Citgo Petroleum Corp.’s refinery in Corpus Christi, Texas, had to cut rates at a key gasoline production unit, though a company spokesman declined to confirm this.
The refinery problems have caused some concern over gasoline tightness in the US, particularly after the US Energy Department reported last week a surprisingly large decline in gasoline stockpiles and continued high demand beyond the traditional US driving season. In this week’s report, gasoline stocks are expected to fall 1.8 million barrels, according to a Dow Jones Newswires survey of analysts.
Crude stocks are expected to fall 800,000 barrels, according to the survey, and distillate stocks, which include diesel and heating oil, are expected to build 600,000 barrels. Refinery utilization rates are forecast to remain unchanged.
In London, October Brent crude rose 13 cents to $71.08 a barrel on the ICE futures exchange in London.
Heating oil futures on Nymex rose 0.38 cent to $2.0135 a gallon (3.8 liters). Natural gas prices edged down a tad to $5.374 per 1,000 cubic feet.
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First Published: Tue, Aug 28 2007. 02 58 PM IST