LONDON, June 16: World oil prices continued to rise on Thursday after surging the day before when official data showed a drop in US crude inventories, sparking supply worries despite Opec’s decision to increase its daily output quota.
New York’s main contract, light sweet crude for delivery in July, rose 53 cents to $56.10 per barrel in early deals. The contract had surged to an intra-day high of $56.75 on Wednesday.
In London, the price of Brent North Sea crude oil for delivery in August rose 35 cents to $55.59 per barrel. The July contract expired on Wednesday at $54.50.
“Attention in the end has focused on the US inventory data because excluding Saudi Arabia, nobody really thinks that the other Opec members have actually got any capacity to put their output higher,” Seymour Pierce analyst Richard Slape said.
“All they’re doing is legitimizing the current overproduction.”
Oil prices had jumped briefly to two-month high points on Wednesday after the US Department of Energy (DoE) said crude oil reserves fell 1.8 million barrels to 339 million in the week ending June 10.
The data was released a few hours after the Organization of Petroleum Exporting Countries’ 11 members agreed to raise its production ceiling by 500,000 barrels per day (bpd) on July 1 and said it might repeat the move by September.
However traders reacted little to the move as Opec’s quota increase was largely seen as a symbolic gesture because the cartel was already pumping more oil than its official ceiling of 27.5 million bpd set before Wednesday’s increase.
Despite the DoE reporting a rise in weekly US distillates stockpiles, the market remains worried about a possible heating fuel shortage during the fourth quarter.—AFP
