Oil Market

I receive daily e-mails concerning Oil Prices so I thought I would start a thread with these updates. So next time you see the price jump at the pumps you will know why its happening.


Oil hold onto gains after IEA warns global oil market is tightening

London- Oil held onto earlier gains as the market remained underpinned by a warning from the International Energy Agency (IEA) that the global market is tightening and that growth in product supply might not meet peak demand in June.

The agency, an advisor to 26 industrialised nations, called on OPEC to raise output and said supplies would need to rise significantly to meet the forecast 1.6 mln bpd jump in June product demand.

It added that while it believes refining output should improve by July and August, the increased activity will eat into global crude oil stocks over this period unless OPEC ups output.

At 2.29 pm, London Brentcrude for June delivery was up 78 cents at 66.57 usd per barrel. Meanwhile, New York crude for June delivery was up 33 cents at 62.15 usd a barrel.

Commenting on the IEA report, Barclays Capital analysts said: "With demand projected to grow robustly, estimates for non-OPEC supply growth trimmed back, OECD inventories on a downwards trend and OPEC production stagnant, the overall picture we draw... is one that is very supportive indeed for higher prices".

Oil prices have drawn support in recent weeks from worries over product supply, specifically US gasoline supply, which has fallen well below average levels just as the country heads into the peak demand summer season.

Also, while US crude supply is still adequate, prices have been boosted this week by news of further supply disruptions in Africa.

France's Total said yesterday two workers were killed in a fire that has halted production at its Nkossa platform, located 50 km off the south-west coastline of Congo.

Meanwhile, in Nigeria, militants fighting for a greater share of the country's oil wealth have blown up three oil pipelines operated by ENI this week and kidnapped four US oil workers.

Cheers!
DayDream