LONDON, July 26: World oil prices overcame early losses to climb on Tuesday, as dealers expected large falls in crude stockpiles when the US government publishes its weekly energy inventories report on Wednesday. New York’s main contract, light sweet crude for delivery in September, rose 30 cents to $59.30 per barrel in early deals.
In London, the price of Brent North Sea crude oil for delivery in September increased by 50 cents to $58.36 per barrel.
“The market is pricing in large crude stock falls in tomorrow’s data,” said Jamal Qureshi, an analyst for PFC Energy. Prices had fallen earlier on Tuesday, on prospects for weaker Asian demand. Analysts said the market had been reacting in part to Chinese and Indian import figures, which pointed to slowing demand in both countries.
“We’ve got slightly lower levels of demand, so imports are lower” in both countries, Investec analyst Bruce Evers said. Indian crude imports retreated by 13.5 per cent in June to 7.63 million barrels per day (mbpd), compared with 8.82 mbpd in June 2004, official figures showed on Tuesday.
The previous day, China said its crude imports dipped 3.5 per cent in June compared with the same figure last year. That suggested a demand growth rate of 3.9 per cent in 2005 compared with 15 per cent rate in 2004.
However, Victor Shum, a Singapore-based analyst with US energy consultancy firm Purvin and Gertz, said demand could rebound in China because of the yuan revaluation last Thursday. There was still no consensus on the impact of the revaluation but speculators were “clinging to the potential impact of a rise in demand in China because import of crude oil now appears cheaper”, Shum added.
Elsewhere, the US Department of Energy was to publish its weekly snapshot of energy inventories on Wednesday. Traders anticipated a fall in US crude inventories caused by recent hurricanes hitting vital oil refineries and platforms in the Gulf of Mexico region.—AFP
