Oil Prices Fell Back
(LONDON) – AFP - Oil prices continued to weaken this week as trading volumes fell back in the absence of concrete news from the Organisation of Petroleum Exporting Countries (OPEC), that earlier this month teased the market with talk of increasing output.
On the London market, the price of benchmark Brent crude for September delivery was trading at 27.45 dollars a barrel by midday Friday, down from 27.96 dollars the previous week.
In New York, light sweet crude for September delivery ended trade on Thursday at 28.02 dollars a barrel, down from 30.93 dollars for the August contract seven days before.
On the London market, prices rallied later in the week after falling on Monday below the 27-dollar-mark for the first time since May 11, chiefly as a result of declining petrol (gasoline) prices in the United States.
Dealers said prices were more moderate because the end of the summer driving season in the United States is in sight and stocks have begun to build.
On Tuesday, the American Petroleum Institute reported significant builds in petrol, as well as in crude and distillate stocks.
The institute said crude stocks rose 1.883 million barrels to 293.7 million in the week to July 21 from the previous week and were 37.45 million barrels lower than a year ago.
Gasoline stocks rose 1.713 million barrels to 208.2 million from the previous week and were 45 million higher than a year ago.
Distillate fuel stocks rose 1.732 million barrels to 111.5 million from the week before and fell 23.83 million barrels from a year ago.
The market also continues to believe that Saudi Arabia is leaking extra oil into the market, even if expectations of an output rise from OPEC as a whole
have been undermined by the fall in prices.
Saudi Arabian Oil Minister Ali al-Nuaimi on July 3 promised an extra 500,000 barrels per day if needed to stabilise prices, but then came under fire from fellow OPEC members for his unilateral stance.
The apparent rift appeared solved at the start of last week when OPEC president Ali Rodriguez, who is also Venezuelan Oil Minister, said he had asked member states to prepare for a 500,000 barrel-a-day increase by the end of this month if prices did not fall.
The fact that prices have dropped calls any output increase into question.