LONDON, July 12: The price of Brent North Sea crude oil breached $77 per barrel on Thursday as tight US energy supplies and geopolitical jitters in Nigeria fuelled speculative buying, traders said.
London’s Brent North Sea crude for August delivery struck $77.07 per barrel, a level last seen August 10, 2006. The contract was also within grasp of a record high $78.64 hit earlier that month.
New York’s main oil futures contract, light sweet crude for delivery in August, jumped to $73.80 per barrel, its highest level since August 15, 2006.
“With Brent challenging the prior all-time highs, speculators are now piling up futures contracts in anticipation of a new record high price,” said Louis-Vincent Gave, head of GaveKal Research.
Prices also found strong support from fresh unrest in Nigeria, the eighth biggest crude oil exporter in the world and the leading African producer.
Traders mulled a mixed stockpiles report released on Wednesday by the US Department of Energy.
Crude futures had fallen after the DoE said US gasoline or petrol reserves climbed by 1.2 million barrels to 205.6 million in the week ending July 6. That beat analysts' forecasts of a gain of 825,000 barrels.
But gasoline stocks were 3.8 percent lower than at the same stage last year.
US refineries meanwhile picked up steam, operating at 90.2 per cent of capacity compared with 90.0 per cent the prior week.
Analysts had nonetheless banked on a stronger performance of 90.4 per cent.
“Despite the rise in gasoline stocks, the refinery utilisation numbers are still below ideal,” noted Sucden analyst Michael Davies.
Traders are focused on gasoline reserves due to peak demand in the ongoing US driving season, whereby many Americans take to the roads to reach their summer holiday destinations.
In London later on Thursday, Brent North Sea crude for August delivery showed a hefty gain of $1.37 at $76.81 per barrel in electronic deals.
New York’s main oil futures contract, light sweet crude for delivery in August, stood 89 cents higher at $73.45 in US floor trading.—AFP