Oil Price Slips Below $60 Per Barrel As Fears Ease

Oil prices dipped below the $60 a barrel mark in New York yesterday as fears over supply shortages eased.

Figures from the US showing a rise in oil stocks contributed to the relief – leaving the cost of crude well below August’s record level of more than $70.

Forecasts that Hurricane Wilma will miss key oil facilities were another factor. But experts warned the price could move up again fairly swiftly.

Kevin Norrish, oil analyst at Barclays Capital, said: “We don’t see this as a turning point for the oil market. It is a period of temporary weakness.”

The US government’s latest inventories report showed arise in both crude and gasoline stocks.

This followed the release of 60 million barrels of oil by the International Energy Agency after Katrina devastated Gulf of Mexico oil facilities. The IEA said on Thursday it was prepared to take action to address future shortages if necessary.

Weather forecasts added relief, with continued predictions that Wilma is likely to avoid key oil refineries.

Yesterday’s fall in the oil price sent shares in UK oil giants BP and Royal Dutch Shell lower in London.

Meanwhile, yesterday, it was reported that Venezuela’s President Hugo Chavez is approaching his wary South American neighbours about developing a nuclear energy program – raising questions in Washington about his atomic ambitions.

Mr Chavez, a self-described socialist revolutionary opposed to the US administration, wants to cooperate with Argentina, Brazil and possibly Iran to develop nuclear energy as part of his drive for regional integration