Oil prices steadied on Thursday after a wave of selling triggered by data showing a surprise rise in US crude stocks that eased worries about falling supplies in the world's biggest energy market.
US light crude futures, which fell almost three percent on Wednesday when the data was released, were trading down 15 cents at $32.95 while London Brent futures rose seven cents to $28.95 a barrel.
US light crude prices have drifted since mid January from a 10-month high of $36.37 a barrel but are still historically high.
They have so far in 2004 averaged $34.21, above the 2003 average of $31, which was the highest average in more than two decades, raising consumer calls for oil cartel Opec to loosen the taps.
"I don't think Opec have any interest in prices like this," said William Ramsay, deputy executive director of the IEA, which monitors world energy markets for major industrialised nations.
The latest US oil data showed crude stocks rose 7.9 million barrels per day in the week ended January 30, much higher than market expectations for a 600,000-barrel build.
The injection of supply dragged stocks up from 28-year lows but still kept crude supplies almost 29 million barrels below the five-year average for this time of the year.
"It is the big crude build that got funds selling their long positions. It started the wave of selling," said one oil broker.
The crude build overshadowed a 6.8 million-barrel draw in distillates stocks, which include heating oil, which came during frigid weather conditions.
Oil markets watch US oil stocks closely because the country uses 20/21 million bpd of oil, about a quarter of global consumption.
But concerns about winter fuel supplies are fading as oil dealers start to focus on future months and how Opec might influence prices.
"The market is focusing on the March contract now and the heating demand season will end soon," a broker said.
Several Opec ministers have said recently the group, which controls half the world's crude exports, is likely to agree at its meeting in Algiers next week to leave its official output ceiling of 24.5 million barrels per day unchanged.
But the group, worried world oil demand will fall in the second quarter as rising temperatures in the northern hemisphere reduce oil demand, plan to meet again on March 31.
"From the IEA's point of view stocks are too low and prices are too high," Ramsay said on the sidelines of an energy conference in Bangkok. "We do welcome the attitude of wanting to lower the price."
Comments
Comments are closed.