Oil prices bubble up ahead of US stock figures
Oil prices ticked higher here on Tuesday ahead of figures expected to show a fall in gasoline stocks, with analysts warning of a possible gasoline shortage in the United States this summer.
Benchmark Brent North Sea crude for May delivery rose to $25.73 a barrel from $25.40 at the previous close. In New York, the light sweet crude May contract added 17 cents to $27.65 a barrel in early deals.
Traders were awaiting weekly stock figures from the private American Petroleum Institute (API) later on Tuesday, and were keeping a particularly close eye on gasoline inventories, expected to dwindle going into the US summer 'driving season'.
"The outlook for gasoline continues to look tight -- unless demand turns out to be weaker than expected because of the economic slowdown," the Centre for Global Energy Studies (CGES) warned on Tuesday.
Estimates from the US Energy Information Administration (EIA) show US gasoline stocks at only 198 million barrels, nearly five million barrels fewer than last year's low point, the CGES noted.
"Strong distillate demand for heating and power generation has squeezed gasoline output by refineries and high natural gas prices have contributed to a shortage of key blending components," the London think-tank said in its Monthly Oil Report.
"Refiners will be unable to replenish gasoline stocks in advance of the driving season and will have to maximise gasoline production over the (northern hemisphere) summer at the expense of heating oils," it warned.
GNI analyst Lawrence Eagles said: "With funds and speculators betting on another gasoline shortage in the US this summer, the API reports will have a disproportionate effect on market activity in the coming weeks."
The market was looking for a 1.2-million-barrel increase of crude stocks, but a 1.8-million-barrel drawdown of gasoline and distillate stocks, he said in a research note. Also of interest would be the refinery capacity utilisation, Eagles said.
"Last year the increases in utilisation were slow and steady from March through to June, whereas in 1999 the push to full capacity was completed by the end of April. "We believe that it is more likely that 1999 will be repeated," he said.
This should ensure there would be enough oil-based products to meet demand in most of the United States, although the US Midwest could suffer shortages, he said.
Also of concern to the market was news that Venezuelan oil workers would stage a 48-hour strike starting Wednesday to protest at pay levels at state-owned Petroleum of Venezuela.
Workers are also threatening a longer strike in the near future. But Eagles said: "A two-day strike will not have any impact on Venezuelan crude or product exports."—AFP.
©--Agence France Presse 2001.
© 2001 Mena Report (www.menareport.com)