Oil Prices Fall $4 a Barrel in Three Days
Posted on: Thursday, 30 June 2005, 15:00 CDT
VIENNA, Austria -- Oil prices fell by more than $1 a barrel Thursday, bringing the decline in crude futures to more than $4 a barrel over the past three days.
Brokers attributed the downward momentum to profit-taking at the end of second quarter, rising U.S. supplies of oil and related products and solid refinery output.
Light, sweet crude for August delivery fell $1.21 to $56.05 a barrel in afternoon trade on the New York Mercantile Exchange. The Nymex contract has been sliding since Monday's record close of $60.54 a barrel.
"What started the decline from Monday's high was profit-taking, as hedge funds wanted to book profits ahead of the second quarter," said Victor Shum, an oil analyst at Texas-based energy consultants Purvin & Gertz in Singapore.
On Wednesday, the U.S. Energy Department's statistical arm said inventories of crude oil increased by 1.1 million barrels to 328.5 million barrels, 8 percent above year-ago levels.
Refinery utilization also increased to 96.3 percent of capacity, up from 94.8 percent the week before, and that appeared to give a lift to the fuel supply. Gasoline inventories grew by 300,000 barrels to 216.2 million barrels, or 4 percent above year-ago levels, the government said.
Vienna's PVM Oil Associates said the U.S. data "sent an almost unequivocally bearish signal," adding: "Another reason behind slipping oil prices this week might be simple end-of-quarter profit taking."
Crude oil futures are more than 50 percent above year-ago levels, but would still have to top $90 to reach the inflation-adjusted high set in 1980.
The Organization of Petroleum Exporting Countries, which supplies around 35 percent of the world's daily consumption of 84 million barrels, has sought to bring prices down by raising production quotas, but the market has largely ignored its moves.
Venezuela's oil minister said Wednesday that OPEC didn't have much excess production capacity and that the main reasons for high oil prices were speculation by investors and limited refining capacity.
Surging oil prices could curb Asia's economies, analysts say. Some have predicted the fast-growing region - heavily dependent on oil imports - could slip into a recession if prices don't recede.
China said Wednesday it would soon use its national petroleum reserve, now under construction, to blunt the country's exposure to market volatility.
The reserves "will be used to cope with short-term fluctuations and maintain stability in the market," Han Gensheng, vice president of Sinochem Corp., said on the sidelines of a U.S.-China conference in New Orleans.
The comments indicate that the world's No. 2 oil consumer plans a much more active role for its reserves than those held by the U.S. and Europe, which by policy use them only in the event of severe supply disruptions and not to affect prices.
State-controlled Sinochem is helping to build the mainland reserve.
In other Nymex trading, heating oil futures rose 2.44 cents to $1.6260 per gallon, while gasoline futures fell by a penny to $1.574
---
Associated Press writer Gillian Wong in Singapore contributed to this report.
Source: Associated Press/AP Online
Related Articles
- Oil Price Spike, as Exxon and Others' Profit Skids, Shows Potential for New Economy-Killing Energy Roller Coaster, Says Consumer Watchdog
- Oil Prices Drive Up Exxon Mobil 1Q Profit
- Oil Prices Fall As Crude Stocks Swell
- Oil Prices Steady As Gasoline Futures Gain
- Oil Prices Rise As Gasoline Futures Rally
- Higher Oil Prices and Output Raise Santos Net Profit to a Record BUSINESS ASIA By Bloomberg
- Oil Prices Dip on Crude Stock Expectations
- Oil Prices Climb, Natural Gas Futures Dip
- Oil Prices Push Total to Record 3Q Profit
 |
 |
User Comments (0)
RSS Feeds