Oil prices held just below one-year highs on Wednesday, underpinned by renewed global security worries after the Madrid bombings and expectations data will show another drop in already low US gasoline supplies.
US light crude futures prices were trading at $37.45 a barrel at 0755 GMT, down just three cents on the day but close to a one-year high of $37.80 traded on Tuesday.
Oil dealers said investors might be tempted to lock in some profits since prices have risen more than a dollar this week, but fears of attacks by al Qaeda and a squeeze on US oil supplies would limit the downside.
"Based on the risk/reward, we are more likely to see a quick $1 down than a quick $1 up," said a New York oil broker, who declined to be identified. "What the market does next depends on the stats."
US government's Energy Information Administration (EIA) is due to provide its latest snapshot on the world's biggest oil market later on Wednesday which is expected to show a decline in gasoline and distillate stocks but a rise in crude stocks.
Data last week showed gasoline supplies running five percent below the five-year average in the world's biggest oil market, sparking concerns that refineries would be vulnerable to any shocks in the oil market as they try to build supplies in time for the peak-demand summer driving season.
Analysts surveyed by Reuters said they expected the EIA data to show that crude stocks increased 1.6 million barrels last week, while gasoline dropped 1.35 million barrels and distillates fell one million barrels.
Spain is hunting for the Madrid bombers, with suspicion falling on al Qaeda, who killed 201 people and injured nearly 1,700 last week in Europe's bloodiest guerrilla attack in more than 15 years.
The bombings have sparked worries of other attacks and fears that the US alliance against al Qaeda could start to unravel.
Spain has said it plans to withdraw its troops from Iraq, prompting the US to plead for unity.
"It's essential that we remain side-by-side with the Iraqi people," US President George Bush said. "al Qaeda wants us out of Iraq."
US light crude prices have averaged almost $35 a barrel so far in 2004, well above 2003's average price of $31 which was the highest in more than two decades.
Plans by Opec to cut official production four percent in April as world demand growth outpaces expectations, led by a booming Chinese economy, plus dwindling supplies in the United States have conspired to keep oil prices high and leave consumers fretting.
Comments
Comments are closed.