LONDON— RED-HOT oil prices cooled Wednesday, trading below 50 dollars a barrel in New York as the United States reported a rise in weekly crude inventories and fears of disruption to supplies from Nigeria eased.
The price of Brent North Sea crude oil for delivery in November fell 62 cents to 45.83 dollars a barrel in late deals in London.
On the New York Mercantile Exchange, the price of light sweet crude for November delivery dropped 52 cents to 49.38 dollars a barrel in early trading.
The US Energy Department meanwhile has tapped the US strategic petroleum reserves to release 2.5 million barrels of oil per day into the US market, OPEC’s President Purnomo Yusgiantoro said Wednesday as he tried to reassure the overheated crude market.
Oil prices hit an all-time peak of 46.80 dollars in London on Tuesday and 50.47 dollars in New York after a separatist movement in Nigeria threatened to attack international oil facilities and personnel in the Niger Delta region.
But worries about supply disruptions there eased as the head of the armed movement began talks with government officials in the capital Abuja, according to Information Minister Chukwuemeka Chikelu.
“There are talks going on, which indicates that they should be able to negociate some deal,” Thomas said.
“But the market will want to see a confirmation of that and production, in particular from Shell, to be restarted.”
On Tuesday, oil giant Shell announced that it had been forced to shut down one of its flowstations in Nigeria, but along with Italy’s Agip and Total of France, the company played down any real threat to its output of 2.3 million barrels per day in the African country.
Crude oil futures had smashed the 50-dollar barrier for the first time ever in after-hours New York deals on Monday.
Prices began retreating on Tuesday after OPEC kingpin Saudi Arabia undertook to increase oil production capacity by 1.5 million barrels per day to 11 million within weeks.
Worries about Nigeria earlier in the week unnerved markets already fretting over low global oil inventories, unrest in Saudi Arabia, recent hurricanes in the Gulf of Mexico, violence in Iraq and the financial woes of Russian energy giant Yukos.
Meanwhile demand for oil is growing strongly, particularly in China.
“The spare capacity that the producers have, and in particular Saudi Arabia, has been whittled away and whittled away because of oil demand rising in unforeseen amounts, particularly in China and Asia and North America,” said Robert Skinner, director of the Oxford Institute for Energy Studies.
“The capacity margin is down to a very thin cushion. So when anything happens, and you’re that close to the wire, then it tends to send a much greater signal to the prices than it otherwise would,” he said.
