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Oil prices dip but supply worries linger
Oil prices retreated slightly on Thursday a day after soaring in response to a surprise fall in US commercial crude oil inventories.
The price of benchmark Brent North Sea crude oil for delivery in August dipped 20 cents a barrel to 34.30 dollars in late morning trading here.
New York's reference contract, light sweet crude for August delivery, fell 23 cents to 36.82 dollars per barrel in pre-opening electronic deals.
Prices fell prey to profit-taking a day after surging by over a dollar a barrel in response to figures showing dwindling US commercial crude oil inventories.
The US Department of Energy said crude oil stocks fell 500,000 barrels to 304.9 million in the week to June 25, while the private American Petroleum Institute said they dropped 4.2 million barrels to 304.6 million.
The US government also estimated that gasoline stocks held steady at 205.1 million barrels, while the API reported gasoline inventories declined 2.1 million to 204.12 million.
"The stocks data were supportive, as were the comments from (Saudi Arabian oil minister) Ali al-Nuaimi that he was happy with prices at current levels," said Investec Securities analyst Bruce Evers.
"So it is clear that prices are not going to come back very far. They could stay around these levels much longer than people think," said Evers.
Traders were keeping a close eye on OPEC production.
Faced with record oil prices, the Organization of Petroleum Exporting Countries (OPEC) announced in Beirut on June 3 it would raise production quotas by two million bpd on July 1, and by another 500,000 on August 1.
"But what OPEC and the Saudis don't want to do is to put too much oil into the market place and too much downward pressure on prices," said Evers.
Saudi Arabia's Nuaimi said that OPEC would decide at its next meeting on July 21 whether to "increase or decrease" production.
Asked by reporters if OPEC would proceed with a scheduled output hike from July 1, Ali al-Nuaimi told reporters in Riyadh on Wednesday: "Actual oil prices are fixed by the market and not by OPEC. The price is fair and there is no reason to take a measure to reduce or increase production."
Analysts at Barclays Capital said recent developments indicated prices were likely to find good support at current levels.
"The sharp increase in oil prices (Wednesday), taken together with recent comments from Saudi oil minister Ali al-Nuaimi that current oil prices are fair, strongly suggests that the recent price downtrend in crude is now over," they told clients.
The PUNCH, Friday, July 2, 2004
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STOCK MARKET
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As at Thursday, July 1, 2004
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8,265
8,250
8,235
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| Nestle |
 |
N170.00 |
+150k |
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| Flour Mills |
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N22.20 |
+85k |
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| UBA |
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N11.60 |
+55k |
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| Conoil |
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N179.01 |
-894k |
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| Texaco |
|
N183.00 |
-594k |
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| NB |
|
N63.46 |
-334k |
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Volume: 45.3 million
Value: N928.6 million
Deals: 3,648
Index: 28,414.83
Mkt Cap: N2.032 trillion |
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AUTO WORLD
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