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AP Worldstream: Oil prices dip on expectations of higher U.S. stocks, but Nigeria, Iran concerns linger

Feb 23rd, 2006
by admin.

Feb 23, 2006
Crude oil prices slipped Thursday as expectations of higher U.S. oil inventories calmed a market that has been rattled recently by supply disruptions in Nigeria and Iran's nuclear program.
Light sweet crude for April delivery fell 27 cents to US$60.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell more than a US$1 Wednesday to settle at $61.01 a barrel.
Prices fell amid expectations that weekly U.S. oil inventory data, to be released Thursday, will show crude and gasoline stocks grew but distillate fell. The report was to be released a day later than usual because of the Presidents Day holiday in the U.S. this week.
But some analysts said the concerns about Iran and Nigeria would continue to support prices.
“People are looking at the inventory data,” said Tetsu Emori chief commodities strategist at Mitsui Bussan Futures in Tokyo. “But once actual figures are announced, the price may rebound. The market is more focused on political risk like Nigeria and Iran in the medium and longer term.”
Oil prices spiked earlier this week on news that militants in Nigeria attacked a Royal Dutch Shell PLC-operated pipeline switching station on Monday and a boat they claimed housed Nigerian military personnel. That, and an earlier attack, has forced Shell to halt the flow of about 455,000 barrels a day.
Light, sweet Nigerian crude is in high demand, especially in the United States, making the latest supply disruptions all the more important, traders said.
The Nigerian militants, who are pressing for the release of two of the region's leaders from prison and greater control of oil revenues, have threatened to fire rockets at any ships transporting crude oil from Nigeria.
Nigeria is Africa's leading oil exporter and the United States' fifth-largest supplier, usually exporting 2.5 million barrels daily. Recent attacks on oil facilities by a militant group have cut production there by nearly 20 percent.
Meanwhile, traders remained somewhat concerned about Iran, OPEC's No. 2 producer, after Iran and Russia completed the two days of inconclusive talks Tuesday on Russia's offer to enrich uranium for Tehran to avert suspicions that Iran could divert the nuclear fuel for atomic weapons. That comes amid Western pressure to impose sanctions against Iran.
Nymex gasoline futures were down 0.2 cent to US$1.4745 per gallon, while heating oil futures dipped 0.31 cent to $1.6490 a gallon. Natural gas futures declined 6.3 cents to $7.220 per 1,000 cubic feet.

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