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Oil prices steady: inventory vs. jitters over recent supply disruptions
Crude oil prices steadied March 21 as traders weighed expectations of further U.S. oil inventory increases against anxieties over recent supply disruptions in Nigeria and the impact of international pressure on Iran over its nuclear program.
Light sweet crude for April delivery on the New York Mercantile Exchange slid just 2 cents to $60.40 a barrel in afternoon trading. The contract, which is set to expire when the market closed March 21, dropped $2.35 on March 20.
But May Brent crude futures on London’s ICE Futures gained 13 cents to $61.47 a barrel.
Gasoline futures declined by less than a penny to $1.826 per gallon, while heating oil futures rose by more than 2 cents to $1.762 on colder weather in the Northeast. Natural gas futures climbed 7.1 cents to $6.95 per 1,000 cubic feet.
Supply disruptions — and the potential threat of U.N. Security Council action against Iran — were offset by fears of a supply glut, despite strong global petroleum demand.
U.S. petroleum data the week of March 13 showed that oil stockpiles had climbed to their highest level since the end of May 1999. Meeting demand “Prices seem to be in a trading range between $57 and $64. They are having difficulty moving beyond either of those borders,” Peter Beutel, president of consultant Cameron Hanover said in a report.
Vienna’s PVM Oil Associates suggested gasoline was headed upward in the short term, noting “strong demand ahead of the U.S. driving season and in the Middle East” and concerns about refinery outputs meeting demand.
Nigerian rebels struck an oil pipeline operated by Rome-based Eni SPA’s Agip Oil Co. unit March 17, disrupting the flow of oil. Agip confirmed that the incident was “an act of sabotage” caused by an explosive charge placed near the river.
The company said March 20 that its production in Nigeria would drop by about 13,000 barrels per day while it repairs the pipeline, thought to have been sabotaged by militants seeking a greater share of the country’s oil wealth.
Repairs on the Tebidaba-Brass pipeline in the Niger Delta, will begin the week of March 20 and should be completed by the end of March, Eni said in a statement. Normally the line carries 75,000 barrels per day.
Nigeria, a source of coveted light, sweet crude oil, is Africa’s top oil exporter and the fifth-largest crude supplier to the U.S.
—The Associated Press
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