Royal Dutch Shell Group .com Rotating Header Image

AFX Europe (Focus): Oil prices drop further in Asian trade

Feb 23rd, 2006
by admin.

Feb 23, 2006
SINGAPORE (AFX) – Oil prices continued lower in Asian trading hours, as expectations of a buildup in US crude and gasoline stockpiles offset concerns about supply disruptions in Nigeria, dealers said.
At 11.00 am (0300 GMT) here, New York's main contract, light sweet crude for delivery in April, was down 0.26 usd at 60.75 usd a barrel from its close of 61.01 usd in the US overnight.
“The big thing is the inventory report,” said Tony Nunan, Tokyo-based manager for energy risk management with Mitsubishi Corp. “Everybody is predicting builds in crude and gasoline.”
The US Department of Energy publishes its weekly inventory data on today, a day later than usual, owing to a public holiday in the US on Monday.
Analysts expect stockpiles of US crude to have risen 700,000 barrels, with gasoline up 800,000 barrels and distillates, which include heating fuel, down 1.4 mln barrels.
The US is the world's biggest energy consumer and its energy inventories are closely monitored by the market.
The fall in crude prices also came despite renewed jitters over supply disruption in Nigeria, Africa's biggest oil exporter.
Jason Schenker at Wachovia Securities said: “The market might have overpriced the Nigerian disruption potential.”
He added that there is “a well-supplied market, especially on gasoline” that is likely to be confirmed by the US report on oil inventories.
“The expectation for inventory data,” he said, “is that you will get a buildup of crude and a buildup of gasoline.”
Attacks by Nigerian militants over the weekend on Shell's Forcados oil terminal forced the firm to cut production by 455,000 barrels per day (bpd), equivalent to almost 20 pct of the country's output.
Nigeria, the world's sixth-biggest exporter of oil, produces light, sweet crude, which is easier and cheaper to refine than the heavy, sour crude produced by Saudi Arabia.
“The geopolitical tensions are still there, but the market is getting desensitized to it,” said Nunan.
He added that as long as the situation in the US remains okay, “people will feel that we can get through this thing.”
The market was also keeping an eye on Iran, with analysts saying that tensions over that country's nuclear program could lead to disruption of its oil exports.
Russia has said it hopes to persuade Tehran to create a joint enterprise that will enrich uranium for Iran on Russian territory, enabling Iran to restore a moratorium on enriching uranium at home.
However, Russian President Vladimir Putin said yesterday that his country's talks with Iran were not progressing “easily”.
Iran exports 2.6 million bpd and is the second biggest producer in OPEC after Saudi Arabia.
str/mba/bmm/jm
null

This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Posted in: Uncategorized.

← →

Comments are closed.