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Wednesday, March 9, 2011

World oil prices were mixed on Libya unrest, before US data

World oil prices were mixed on Libya unrest, before US data : LONDON — World oil prices were mixed Wednesday as traders tracked the supply situation amid ongoing unrest in Libya and awaited energy inventory data in the United States.

In London, Brent North Sea crude for delivery in April rose 42 cents to $113.48 per barrel. New York's main contract, light sweet crude for April, fell 22 cents to $104.80.

"Despite the continued fighting in Libya, making a normalisation of Libya's oil production soon an unlikely prospect, concerns about supply tightening have eased a little," Commerzbank analyst Carsten Fritsch said.

Saudi Oil Minister Ali Naimi has downplayed market fears about global shortages, saying Tuesday that his kingdom has extra output capacity of 3.5 million oil barrels per day.

Oil prices spiked to 2.5-year highs in recent days amid escalating violence and supply shortfalls in Libya, a major producer and exporter of crude.

"The rally of crude oil prices is not being driven by an actual tightening of supply but rather the fear that the unrest will spread to other oil producing countries," said Fritsch.

"Should another country on the scale of Libya also exit the market, Saudi Arabia's spare capacities would be likely to fall to a critical level of less than two million barrels a day."

The energy market will later Wednesday digest weekly inventory data from the United States, the world's largest consumer of oil. Traders said that New York crude prices were lower in anticipation that the US Department of Energy will announce another increase in crude stockpiles.

Analysts surveyed by Dow Jones Newswires are predicting that total US oil inventories will rise 600,000 barrels in the week ended March 4, while gasoline (petrol) stocks are seen falling 1.5 million barrels.

Distillate inventories, which include heating fuel, are expected to drop 1.2 million barrels.

White House chief of staff William Daley said Sunday that the US had not ruled out tapping its strategic oil reserves to help dampen the higher cost of oil.

A new short-term forecast from the US Energy Information Administration sees the average 2011 price that refiners will pay for crude at $105 a barrel, $14 higher from its previous monthly forecast, as a result of the unrest in the Middle East. For the latest updates PRESS CTR + D or visit Stock Market news Today

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