LONDON, 22 July 2004 — Oil prices rebounded yesterday amid the latest weekly estimates of commercial US inventories and despite Nigeria’s two main oil unions suspending a threat to paralyze Africa’s biggest oil export industry in a protest over the privatization of refineries.
The price of benchmark Brent North Sea crude oil for delivery in September climbed by 49 cents to $37.50 per barrel in late trading in London.
New York’s light sweet crude benchmark September futures won eight cents to $40.52 per barrel in early deals.
According to a survey by the US Department of Energy, commercial crude oil inventories drained lower but stocks of gasoline and heating oil expanded last week.
Crude oil stocks dropped 3.6 million barrels to 299.3 million, about average for the time of year, the government said. Gasoline inventories rose 2.5 million barrels to 208.4 million, also in line with the average for this time of year with much of the high-demand summer period already past.
Distillates — heating oil and diesel — rose 1.7 million to 118.4 million, with most of the increase caused by heating oil inventories, which rose 1.3 million barrels to 45.8 million. “There is something for everybody,” Prudential Bache trader Christopher Bellew said.
“If you are feeling bearish, you point to the large build in gasoline stocks... But if you are feeling bullish, you look at the drop in crude stocks.
“The trend for build in crude stocks in the United States seems to have been broken in the last few weeks, in spite of the fact that OPEC is producing at very high numbers.
“This is probably the most bullish thing delivered by the figures at the moment,” Bellew said.
World oil prices fell heavily Tuesday on profits-taking after climbing to near-record high levels in New York amid concern over strong global demand.
New York’s light sweet crude for delivery in August expired at $40.86 per barrel, down 78 cents. It had spiked to $42.30 Tuesday, nearing the $42.45 record posted in electronic trading on June 1.
In a bid to help offset rising prices, the Organization of Petroleum Exporting Countries agreed in June to raise its output ceiling by 2.5 million barrels per day by Aug. 1.
Speaking yesterday, OPEC President Purnomo Yusgiantoro said the organization would discuss a further possible output rise for September. Asked by reporters in Jakarta whether OPEC plans such an increase, Yusgiantoro replied: “We’ll discuss it.”
Meanwhile in Nigeria, workers at the blue-collar National Union of Petroleum and Natural Gas (NUPENG) and white-collar Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) suspended a strike planned for next Monday.
