LONDON, June 21: World oil prices cooled on Tuesday after a recent record run but could hit $60 per barrel for the first time should the US government report a drop in weekly crude inventories, analysts said.
New York’s main contract, light sweet crude for delivery in July, eased nine cents to $59.28 per barrel in early deals. On Monday the contract reached $59.52 — the highest level since it was first traded in 1983 — before closing at $59.37.
In London, the price of Brent North Sea crude oil for delivery in August lost 30 cents to $58.02 per barrel, a day after reaching a new record $58.58 — the highest level since trading of Brent began in 1988.
Prices have jumped by 40 per cent since the start of the year, surging to historic high levels Monday when speculators seized upon concerns about possible energy shortages towards the end of this year.
“If we do see a draw in US stocks on Wednesday, I think $60 a barrel is a real possibility,” said Veronica Smart, an analyst at the Energy Information Centre.
Traders, gearing up for the latest weekly snapshot of US inventories data, were particularly interested in levels of distillates, which include heating fuel.
“With crude oil on the edge of $60 per barrel, a number of factors could be the catalyst to send prices trading well above that level — not the least of which is Wednesday’s supply numbers,” said Kevin Kerr, president of Kerr Trading International.
Prices have soared since last Friday on concerns that refineries will struggle to turn enough crude oil into heating fuel to meet fourth-quarter demand.
“Global economic expansion is driving the biggest increase in oil demand in 24 years,” said Kerr. Oil companies traditionally rebuilding stocks at this time of year compounded the problem, he added.
“This window now appears to be closing rapidly and the hardest impact will be on distillates, including heating oil and diesel.”
Traders were meanwhile watching to see if about 550 Norwegian oil workers would go ahead with a threatened strike from midnight.
“There are some concerns about the Norwegian oil workers possibly striking,” Smart said.
