LONDON, Aug 20: Oil prices rose slightly on Wednesday after weekly statistics showed US oil inventories falling, with gasoline stocks hitting their lowest level for nine months.
The price of reference Brent North Sea crude oil for October delivery gained 16 cents per barrel to $28.63.
New York’s light sweet crude benchmark September contract showed a rise of five cents to $30.75 per barrel in early dealing.
A slightly negative price trend earlier in the day was reversed after the US Department of Energy announced crude oil inventories had fallen 1.6 million barrels to 278.8 million barrels in the week ended August 15, compared to the previous week.
Inventories of gasoline declined 1.2 million barrels, to 196.9 million barrels and “are at the lowest level since the week ending November 15, 2002,” the weekly snapshot said.
Although gasoline reserves typically decline in summer as US drivers take to the roads for holidays, they are now 6.1 percent lower from the same time last year.
In the continued lack of significant oil exports from Iraq, any fall in crude stocks was significant, said Commerzbank analyst Jon Rigby.
“The market is saying that without Iraqi crude, the market is relatively tight, and that’s why the oil prices are close to $30,” he said.
“So what is happening here is a weekly confirmation that the market is tight.”
However Prudential Bache analyst Tony Machacek said he was “surprised” at the small increase, arguing that the inventory figures were somewhat skewed.
“The gasoline draw down is less than expected and largely in the West Coast (of the
United States) too,” he said, adding that overall the figures should be “slightly bearish” for prices.
Prices were also being supported by the situation in Iraq, where a devastating truck bomb at the United Nations’ Baghdad headquarters killed a least 24 people on Tuesday. However the bombing attack failed to push prices significantly, leading analysts to speculate that they were already about as high as traders could stomach.
“The fact that the market has not really performed on the upside on these (attacks) as bullishly as we thought makes us fear that the market is rather long,” GNI trader Kevin Blemkin said.
IRAQI OIL: Iraq is expected to restart pumping oil on Saturday through one of the twin pipelines running from the northern Kirkuk field to the Turkish Mediterranean port of Ceyhan, a spokesman for Turkey’s state-run gas company BOTAS said on Wednesday.
Oil flow had been cut off since Friday after the 600-km pipe-line was damaged by an explosion and a subsequent fire which officials blamed on sabotage.
“We expect the pumping to resume on Saturday. The Iraqi side has informed us so,” said the BOTAS official on condition of anonymity.
Oil would be pumped through only one of the twin pipelines as repairs were still needed on the second one following last week’s sabotage, he added.—AFP