November 24, 2006	Friday	Ziqa'ad 2, 1427

LONDON, Nov 23: World oil prices fell further on Thursday, after shedding nearly a dollar per barrel on Wednesday on data showing an unexpectedly big rise in US stockpiles in the past week.

In early trading the New York Mercantile Exchange (Nymex), a barrel of “light sweet crude” for delivery in January was showing a fall of 31 cents to $58.93, following a drop of 93 cents on Wednesday.

In London, Brent North Sea crude contracts for January delivery lost 37 cents to $59.12, following a fall of 90 cents on Wednesday.

The US Energy Information Administration (EIA) said crude oil stocks rose by 5.1 million barrels last week to total 341.1 million -- well above average levels. The market expected a gain of around 600,000 barrels.

The gains came amid a rise of 1 million barrels a day in imports in a week when bad weather led to supply disruptions at the Louisiana Offshore Oil Port (LOOP) and at the Valdez export terminal in Alaska.

The EIA also reported a 1.2 million barrel fall in distillate stocks, which include the key winter heating oil fuel. The fall, which leaves stocks at above average levels, was in line with market expectations.

Surprised by the resurgence in crude stocks, dealers started selling and the price continued to fall early on Thursday in a market that was muted because of the Thanksgiving holiday in the United States.

“Crude futures were lower on Thursday still under pressure from a surprisingly large build-up in US inventories,” said Michael Davies, analyst at Sucden.

The price also fell amid the dissipation of fears over a disruption in exports from Alaska, where bad weather cut supplies sharply through the Trans-Alaskan Pipeline.

“Major damage has been done to the long-term uptrend and it is unlikely oil will make a rapid recovery,” according to a statement from technical analysts at Barclays Capital Bank. “Expect weakness to eventually extend towards 55.” The price has been hovering around $60 per barrel since October. In New York, prices last week hit the lowest level since June 2005, dropping below $55.

With the mid-December meeting of the Organisation of Petroleum Exporting Countries (Opec) approaching, investors remained sceptical about statements of intent from the cartel, which accounts for 40 per cent of the world's crude.

Energy Minister Rafael Ramirez of Venezuela, a founding Opec member, told Venezuelan television that Opec would agree on a new cut in oil production at a meeting in Nigeria next month.

The new cut “will be proposed ... because (oil) price remains unstable,” he said. “In December there will be consensus to continue cutting on volume,” he said, without indicating by how many barrels Opec would cut production.

On Monday, Nigeria's oil minister Edmund Daukoru issued similar remarks which are likely aimed at reviving prices, or at least stabilising them, a drop in supply automatically raises prices. But doubts remain over whether Opec can hold back production.—AFP