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LONDON
Thu Apr 22, 2010 6:48am EDT
(Reuters) - Oil fell to around $83 per barrel on Thursday after higher U.S. inventories signaled demand in the world's top oil consumer was lagging the recovery in the global economy.
Crude inventories in the United States rose unexpectedly last week, government statistics showed, and fuel supplies climbed more than forecast.
The market received some support from news of an explosion on the Iraq-Turkey oil pipeline which carries a quarter of Iraq's crude exports.
U.S. benchmark June light crude oil futures, also known as West Texas Intermediate (WTI), fell 61 cents to $83.07 a barrel by 1040 GMT. The front-month contract reached an 18-month high above $87 on April 6.
U.S. prices came under pressure from figures showing a 1.8-million-barrel rise to over 34 million barrels last week in crude oil inventories at Cushing, Oklahoma, the landlocked pricing point for NYMEX crude futures.
The Energy Information Administration (EIA), said the increase at Cushing was responsible for most of a national U.S. crude oil stocks rise of 1.9 million barrels.
"Our view is that oil prices are somewhat decoupled from fundamentals at the moment and do not yet reflect the high level of stocks," said Carsten Fritsch, energy analyst at Commerzbank.
"AHEAD OF FUNDAMENTALS"
Edward Meir, analyst at brokers MF Global, highlighted what he saw as the potentially negative influence of the dollar on oil as the euro remained under pressure after dropping against the dollar for a fifth day in a row on Wednesday.
The dollar was up around 0.3 percent against a basket of currencies on Thursday.
"We would suggest that prices have gotten somewhat ahead of the fundamentals," he said in a note to clients.
"We are consequently looking for a modest pullback over the short-term, particularly if the dollar continues to strengthen on the back of the Greek debt crisis, which judging from recent market action, still looks to be a reasonable bet," he added.
ICE Brent crude futures have been holding up better than U.S. futures and June Brent was trading around $2 higher than WTI on Thursday, down 57 cents at $85.13 a barrel.
North Sea crude supplies will tighten over the next month due to offshore maintenance work and Brent is also responding to evidence of more Chinese demand, analysts say.
China's apparent oil demand in March rose 12.3 percent from a year earlier, the seventh double-digit increase in a row, according to Reuters calculations from official data released on Wednesday.
Rising consumption in China, the world's second-largest oil user, has helped support crude prices as demand from developed economies struggles to rebound from the recession.
The pipeline blast in the northern Iraqi province of Nineveh is likely to affect oil exports via the Kirkuk to Ceyhan pipeline for about three days, an Iraqi oil official said.
Police blamed a bomb planted by suspected Sunni Islamist insurgents fighting to undermine the Shi'ite majority propelled into power after the 2003 fall of Sunni dictator Saddam Hussein.
(Additional reporting by Alejandro Barbajosa in Singapore; editing by James Jukwey)
Source: http://www.reuters.com/article/idUSTRE6142V820100422
Crude inventories in the United States rose unexpectedly last week, government statistics showed, and fuel supplies climbed more than forecast.
The market received some support from news of an explosion on the Iraq-Turkey oil pipeline which carries a quarter of Iraq's crude exports.
U.S. benchmark June light crude oil futures, also known as West Texas Intermediate (WTI), fell 61 cents to $83.07 a barrel by 1040 GMT. The front-month contract reached an 18-month high above $87 on April 6.
U.S. prices came under pressure from figures showing a 1.8-million-barrel rise to over 34 million barrels last week in crude oil inventories at Cushing, Oklahoma, the landlocked pricing point for NYMEX crude futures.
The Energy Information Administration (EIA), said the increase at Cushing was responsible for most of a national U.S. crude oil stocks rise of 1.9 million barrels.
"Our view is that oil prices are somewhat decoupled from fundamentals at the moment and do not yet reflect the high level of stocks," said Carsten Fritsch, energy analyst at Commerzbank.
"AHEAD OF FUNDAMENTALS"
Edward Meir, analyst at brokers MF Global, highlighted what he saw as the potentially negative influence of the dollar on oil as the euro remained under pressure after dropping against the dollar for a fifth day in a row on Wednesday.
The dollar was up around 0.3 percent against a basket of currencies on Thursday.
"We would suggest that prices have gotten somewhat ahead of the fundamentals," he said in a note to clients.
"We are consequently looking for a modest pullback over the short-term, particularly if the dollar continues to strengthen on the back of the Greek debt crisis, which judging from recent market action, still looks to be a reasonable bet," he added.
ICE Brent crude futures have been holding up better than U.S. futures and June Brent was trading around $2 higher than WTI on Thursday, down 57 cents at $85.13 a barrel.
North Sea crude supplies will tighten over the next month due to offshore maintenance work and Brent is also responding to evidence of more Chinese demand, analysts say.
China's apparent oil demand in March rose 12.3 percent from a year earlier, the seventh double-digit increase in a row, according to Reuters calculations from official data released on Wednesday.
Rising consumption in China, the world's second-largest oil user, has helped support crude prices as demand from developed economies struggles to rebound from the recession.
The pipeline blast in the northern Iraqi province of Nineveh is likely to affect oil exports via the Kirkuk to Ceyhan pipeline for about three days, an Iraqi oil official said.
Police blamed a bomb planted by suspected Sunni Islamist insurgents fighting to undermine the Shi'ite majority propelled into power after the 2003 fall of Sunni dictator Saddam Hussein.
(Additional reporting by Alejandro Barbajosa in Singapore; editing by James Jukwey)
Source: http://www.reuters.com/article/idUSTRE6142V820100422
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