LONDON, April 7: World oil prices steadied on Thursday amid scepticism over the ability of refineries to deliver adequate stocks of gasoline during the US summer driving season, as London said goodbye to pit trading after 25 years. New York’s main contract, light sweet crude for delivery in May, eased five cents to $55.80 a barrel in early deals. In London, the price of Brent North Sea crude oil for delivery in May added 31 cents to $55.58 a barrel.
London’s International Petroleum Exchange ended a quarter of a century of tradition on Thursday by holding its last session of pit trading, paving the way for full-scale electronic dealing to begin Friday.
Oil prices have fallen heavily on profit-taking since supply worries pushed them to fresh historical high points on Monday: $58.28 a barrel in New York and $57.65 in London.
Crude oil prices were expected to remain above $50 a barrel throughout 2005 and 2006, according to a forecast released on Thursday by the statistical arm of the US Department of Energy (DoE).
Its estimate came as European Central Bank President Jean-Claude Trichet warned that
the runaway price of oil could put the brakes on economic growth in the 12-country eurozone and fuel inflationary pressures in the single currency region.
Traders, meanwhile, continued to take their cue from US crude inventory data published a day earlier.
Wednesday’s data from the DoE said US refineries operated at 93.7 per cent of capacity in the week to April 1, up from 91.1 per cent the previous week.
The higher capacity level was a result of refineries increasing production after undergoing maintenance during February and April, the DoE said.
Gasoline production rose to more than 8.6 million barrels per day (mbpd), it added.
But analysts cast doubt over the data.
“Did US refiners really produce 8.6 mbpd of gasoline last week, despite refinery problems and still-substantial maintenance at Midwest refineries?” Societe Generale analyst Deborah White questioned.
With prices of US gasoline, or petrol, hitting new record highs, the market was sensitive to inventory levels as many Americans prepared to take to the open roads in their vehicles for the summer holiday period starting next month.
The DoE report showed a drop in gasoline inventories of 2.1 million barrels to 212.3 million, in line with market forecasts but 5.5 per cent higher than at the same stage last year.
Demand for gasoline has sharply increased by 1.9 per cent over the last four weeks, to around 9.1 mbpd, official US data showed.—AFP
