LONDON, 2 September 2004 — Oil prices soared yesterday as weekly estimates of US commercial crude inventories slumped unexpectedly, with support coming also from violence in Nigeria and a hurricane headed for Florida, analysts said.
The price of London’s benchmark Brent North Sea crude oil for delivery in October rose $1.49 to $41.10 per barrel in late deals. In New York, light sweet crude for October delivery jumped $1.68 to $43.80 per barrel in early afternoon trading. “Everybody is focusing on the fall in crude stocks which is well above market forecasts,” Societe Generale analyst Frederic Lasserre said.
US commercial crude inventories slid by 4.2 million barrels to 287.1 million in the week that ended Aug. 27, the US Energy Department said.
In a separate survey, the private American Petroleum Institute recorded a fall of 8.1 million barrels to 281.4 million, while analysts’ consensus was for a rise of 1.2 million barrels. “Eight million is the biggest reported crude decline reported by the American Petroleum Institute in the last six months,” Infinity analyst John Person said. “This takes API crude stocks ... back to the dangerously low minimum operating levels and a 28 year-low,” he added.
Oil prices rebounded yesterday after plunging by more than 10 percent in under two weeks on fading supply fears. Potentially devastating Hurricane Frances also helped to lift oil prices yesterday, Person said.
The hurricane yesterday roared toward the Bahamas and the Turks and Caicos islands and appeared to have set its sights on Florida, still reeling from a deadly storm last month.
“It seems that we are still catching up with shipping delays from our last hurricanes,” Person said - referring to Hurricane Charley that disrupted US oil supplies in August. Violence in major oil producer Nigeria meanwhile gave extra support to oil prices, analysts said.
Oil giant Shell yesterday said one of its security guards had been killed in fighting between armed militants near one of the Anglo-Dutch company’s production facilities in Nigeria’s strife-torn Niger Delta.
The facility was still operating normally, a company official said. “There was a reported case of an attack on the Alakiri flowstation on Sunday which led to the death of one staff member,” Shell spokesman Don Boham told AFP.
Elsewhere, traders followed reports that Iraq’s strategic northern pipeline to Turkey had been attacked. But an Iraqi oil executive denied the market rumors.
