Oil prices descended from 10-year highs scaled last week, but remained high, as data showed a further fall in US stock levels and Opec dashed any lingering hopes that it might act to alleviate the situation before its conference on September 10 .
Prices were particularly strong in the aftermath of the latest data from the American Petroleum Institute on Tuesday, indicating that stocks remained around 24-year low levels.
They were also boosted by expectation that Hurricane Debby would crash into the massive refinery owned by Hovensa in St Croix in the Virgin Islands. Prices weakened slightly as the hurricane threat diminished and as stocks data from the Energy Information Administration proved slightly less bullish that that from the API.
OIL: Hot. Oil prices remained high this week, as the latest data on US stocks suggested supplies remained tight and the Organisation of Petroleum Exporting Countries' (Opec) quashed any residual hopes of an output increase before its next conference on September 10 in Vienna.
By midday Friday in London, benchmark Brent crude for October delivery was trading at $30.42, marginally lower than a week ago when it stood at $30.72.
In New York, light sweet crude for October delivery slipped to $31.63 late Thursday from $31.94 for the September contract the previous week.
Oil prices were once again spurred by the latest US stocks data, although the impact of the American Petroleum Institute report on Tuesday was modified by slightly less bullish data from the Energy Information Administration released on Wednesday, analysts said.
According to the EIA, US crude stocks fell by 4.1mn barrels to 284.7mn in the week ended August 18 from the previous week.. The API had reported that stocks remained close to 24-year low points, falling by 7.774 million barrels to 297.7 million on the week.
Year-on-year, crude oil stocks were 38 million barrels lower, the EIA said, compared with the API annual fall of 35.4 million.
Turning to the crucial distillate fuel stocks - particularly in demand ahead of winter in the northern hemisphere - the EIA reported a rise of 900,000 barrels to 112.4 million. For the week, compared with the API's estimate of a 2.89 million. -barrel fall to 111.2 million..
On the year, the EIA said distillate fuel stocks fell by 27.0 million barrels, smaller than the API's estimate of a 30.7 million. -barrel decrease.
The market, meanwhile, largely ignored US President Bill Clinton's remarks that he would seek to convince Opec members to increase their production sufficiently to bring the price of crude down to about $25 a barrel.
Espousing the argument that overly high prices curb growth and lead to reduced demand, Clinton said Opec countries "are much better off with a price that is below what it is now, but one that can be sustained," he said. "They don't want to go to $13 a barrel again, but it needs to be in the low 20s somewhere. "I think the mid-20s would be a more sustainable rate," he said.
Senior Opec official Shokri Ghanem said Thursday that the producers' body might increase production if a market analysis pointed in that direction, but ruled out action before the September 10 meeting.
On Wednesday, Opec Secretary General Rilwanu Lukman also ruled out immediate action in an interview with the Arabic-language London-based Asharq al-Awsat. "It is not possible for Opec to intervene every day and each time prices go up," Lukman said.
Last month, the organisation pledged its commitment to its price band mechanism, providing for an automatic output increase of 500,000 barrels per day if the price of a basket of Opec crudes remains above $28 for 20 consecutive days.
The price of the Opec basket has been higher than $28 since the start of last week, meaning that, even if prices remained high, an automatic increase would not be triggered until the scheduled Opec meeting.
© -- Agence France Press.
© 2000 Mena Report (www.menareport.com)
