LONDON, Aug 16: Oil prices fell on Tuesday in the absence of major production problems at refineries in the United States, and on the eve of US crude inventories data, dealers said.
New York’s main contract, light sweet crude for delivery in September, lost 22 cents to $66.05 per barrel in early trade. It had reached $67.10 on Friday — the highest point since it was first traded in 1983.
In London, the price of Brent North Sea crude oil for delivery in September, which expires later Tuesday, shed 18 cents to $65.40 per barrel. The contract hit a new high of $66.85 dollars on Monday.
Following a record-beating past 10 days, prices have calmed so far this week on profit-taking. But raised tensions in Iran remained a concern, analysts said.
“While most of the refinery plants that faced outages last week are either at or close to being back on line, the lack of spare refining capacity continues to be a worry for the market and is price supportive in the current environment of strong demand and geopolitical tensions,” said Barclays Capital analyst Kevin Norrish.
There are still some US refiners that are almost but not quite there. Chevron, however, announced on Monday that its 260,000 barrels per day El Segundo refinery had resumed operations.
Traders, meanwhile, were looking to the US government’s weekly snapshot of crude inventories, due for publication on Wednesday, and forecast to show a drop in gasoline (petrol) reserves of 1.5 million barrels.
Sucden analyst Sam Tilley said that prices could yet mount.
“The market has the capacity to hit $70 or higher this year, especially if the US steps up its rhetoric against Iran and high distillate demand in the fourth quarter puts pressure on supplies,” Tilley said in London.
He added that on Monday, Brent “crude hit another record on the back of the US refusal to rule out force against major oil producer Iran”.
Iran is the second-largest producer in the Organization of Petroleum Exporting Countries (Opec) after Saudi Arabia, producing 4.2 million barrels of oil per day.—AFP
