Associated Press Update 12: Crude Oil Futures Remains Flat in Asia 06.09.2005, 12:35 AM
Crude futures remained flat in Asia early Thursday despite a fall in U.S. crude inventories, as fears eased over distillate supplies in the world's largest energy consumer and the market began to look ahead to next week's OPEC meeting for supply direction.
Midmorning Thursday in Asia, July contract crude on the New York Mercantile Exchange was down 9 cents at US$52.45 a barrel in after-hours trading after a roller-coaster session overnight in floor trading. In New York, the contract initially spiked more than US$3 upon the release of the U.S. Department of Energy midweek petroleum stocks snapshot, but then settled at US$52.54, down US$1.22.
In its latest petroleum supply report, the Energy Department's Energy Information Administration said crude oil inventories fell last week by 3 million barrels to 330.8 million barrels. Inventories are still about 10 percent above year-ago levels.
The data also showed gasoline inventories fell by 100,000 barrels to 216.6 million barrels, but were still 6 percent higher than a year ago. The supply of distillate fuel, which includes diesel, heating oil and jet fuel, grew by 1.3 million barrels to 107.7 million barrels, easing fears ahead of an expected rise in second quarter demand.
"Most of the key components of the Energy Information Administration weekly oil report went against expectations," said Energyintel analyst David Knapp. "What the market grabbed onto was an unexpected 1.3 million barrel distillate stockbuild, pushing prices down."
Refineries across the United States had pushed output up in recent weeks, contributing to the build in distillates, a premium when the Northern Hemisphere winter swings around.
Traders also began looking ahead to next week's Organization of Petroleum Exporting Countries meeting in Vienna, Austria, where the cartel is expected to decide on its output figures for the later half of the year.
OPEC Secretary-General Adnan Shihab-Eldin said Wednesday its members are currently pumping around 30.1 million barrels a day. The group, which produces around 40 percent of global oil, has an official ceiling of 27.5 million barrels a day.
"Later in the week, as the meeting gets closer, the statements from OPEC will be watched more closely," said Victor Shum, oil analyst at Texas-headquartered energy consultants Purvin & Gertz in Singapore.
Shihab-Eldin said they are considering whether to raise output by a further half million barrels daily. Some analysts are dismissing such a move since OPEC is already producing above its quota and the only member country with the known ability to add barrels is Saudi Arabia.
Crude prices rose in 2004 as a surge in global oil demand and unplanned outages left excess capacity hovering about 1 percent above daily consumption of over 82 million barrels daily, leaving little wiggle room in the supply chain.
Prices are now about 40 percent higher than a year ago.
