OiL PRICES: Above $US 96 on speculation United States Supplies

OiL PRICES: Above $US 96 on speculation United States Supplies
Crude oil rose above $96 a barrel in New York on speculation U.S. stockpiles fell for a seventh week and as a storm dropped snow in the Northeast.

Oil also gained after militant attacks in Nigeria, Africa's biggest crude producer, increased concern that violence will deepen production cuts. A U.S. Department of Energy report tomorrow will show a drop in inventories last week, from their lowest in almost three years, a Bloomberg News survey showed.

``If those numbers continue to run to the negative, that could be a factor that will put upward pressure on oil prices,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.

Crude oil for February delivery climbed as much as 62 cents, or 0.7 percent, to $96.60 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $96.39 at 1:28 p.m. in Singapore.

The last Dec. 31, the contract fell 2 cents to $95.98, bringing the gain for 2007 to more than $35 a barrel, or 57 percent, the biggest annual percentage increase since 2002. New York futures reached a record $99.29 on Nov. 21 as a weaker dollar made crude cheaper in other currencies.

U.S. crude oil stockpiles probably dropped 3.15 million barrels in the week ended Dec. 28, from 293.6 million barrels the week before, the lowest since the week ended Jan. 14, 2005, according to the median of responses by four analysts before the Energy Department report. All the analysts said supplies dropped last week, citing increased processing rates to make fuel and a drop in inventories in states along the Gulf Coast.

Brent, Nigeria
Brent crude for February settlement rose as much as 68 cents, or 0.7 percent, to $94.53 a barrel on the ICE Futures Europe exchange. It was at $94.25 at 1:17 p.m. Singapore time. The London benchmark rose 54 percent last year, the most since 1999, when prices more than doubled. The New York and London exchanges were closed yesterday for the New Year's Day holiday.

Nigerian militants killed 12 people in the southern oil city of Port Harcourt in attacks on two police stations and a hotel, the state-run News Agency of Nigeria said yesterday, citing Felix Ogbaudu, the regional police chief.

Violence by militants has reduced Nigeria's output by 20 percent since the start of 2006.

Four police officers were shot dead at the Borokiri and Trans Amadi police stations, News Agency of Nigeria said on its Web site. Seven civilians, some of whom were returning from midnight church services to usher in the New Year, were gunned down, the news service said. The militants attacked the Presidential Hotel, the city's most popular, killing a security guard in the lobby, the agency said.

Heavy Snow
A winter storm in the U.S. Northeast, where four-fifths of the country's heating oil is consumed, may boost crude demand. A storm that swept east from the Great Lakes could drop as much as 14 inches (36 centimeters) of snow on parts of northern New England today.

Energy usage for heating in the Northeast is expected to be ``much above normal'' today and on Jan. 3 and then fall to below normal, said a forecast yesterday from Meteorlogix LLC.

A heavy snow warning is in effect from the southern Adirondack Mountains to northern Maine through tomorrow morning, the National Weather Service said yesterday. Severe conditions are likely and could make travel dangerous.

Parts of Maine may receive 6 inches to 14 inches as the storm moves toward western Nova Scotia in Canada, the U.S. forecasting agency said. Heavy snow also is expected in Vermont and New Hampshire, the weather service said, after the storm knocked out power in parts of Michigan and Ohio.

Heating oil for February delivery rose as much as 1.31 cents, or 0.5 percent, to $2.6625 a gallon on the Nymex. It was at $2.6560 at 12:25 p.m. Singapore time.

``Longer term, all the energy sectors will trend higher in 2008 and 2009,'' Peter McGuire, managing director of Commodity Warrants Australia in Sydney, said in an interview today. ``There are geopolitical tensions, there are a number of other factors that can contribute to price rises.''

Via: Bloomberg|by Angela Macdonald-Smith and Christian Schmollinger

No comments: