June 27, 2007	Wednesday	Jamadi-us-Sani 11, 1428

LONDON, June 26: World oil prices fell heavily on Tuesday on expectations of a further rise in US crude stockpiles and news of increased output from key producer Nigeria, traders said.

In London, Brent North Sea crude for August delivery slumped $1.09 to $70.27 per barrel in electronic deals.

New York's main oil futures contract, light sweet crude for delivery in August, slid $1.28 to $67.90 per barrel in US floor trading.

Traders are expecting on Wednesday to learn of another increase for crude US stocks when the American government updates the market with its latest weekly report.

“Views on US oil statistics for the week ended June 22 point to a build in crude stocks as refinery snags limit the scope for a rise in crude runs,” said BNP Paribas analyst, Harry Tchilinguirian.

Oil prices were also dampened on Tuesday by news that US energy giant Chevron has resumed operations at its facility in southern Nigeria that was shut down two weeks ago because of community unrest.“We have restored the output of 42,000 barrels of crude per day at the Abiteye flowstation,” a company spokesman told AFP.

Around 20 youths occupied the 70,000-barrel-capacity facility on June 17, cutting back 42,000 barrels in daily production.

Industry sources said that the villagers were demanding jobs, money and social amenities from the US oil giant.

Last month, Chevron was forced to shut in 15,000 barrels of crude per day at its Funiwa oilfield in nearby Bayelsa state after the kidnapping of four Italians, an American and a Croatian. The men were later released.

Chevron is Nigeria's third largest operator, accounting for some 360,000 bpd of the country's total output of 2.6 million barrels, a quarter of which is lost to unrest in the Niger delta.

Despite lower oil prices on Tuesday, the London-based Centre for Global Energy Studies has warned that the price of oil will soar in the coming months unless the Organisation of the Petroleum Exporting Countries ramps up output.

Opec argues that the oil market is well-supplied.

The Paris-based International Energy Agency has also pressured the cartel to pump more crude in order to prevent higher prices. —AFP