Business | Oil & Gas
Oil slides towards $132 on surprise US stock build
Oil fell over $1 towards $132 a barrel yesterday after a surprise build in diesel and heating oil stocks in the United States last week, bringing losses in the past four days to over $4.
- Reuters
- Published: 00:04 June 19, 2008
London: Oil fell over $1 towards $132 a barrel yesterday after a surprise build in diesel and heating oil stocks in the United States last week, bringing losses in the past four days to over $4.
"The distillate build is pressuring heating oil, which had been the darling of the market, said Eric Wittenauer, an analyst at Wachovia Securities.
US crude was down $1.71 at $132.30 at 1529 GMT, extending losses of nearly $3 in the past three sessions. London Brent crude was $1.13 cents lower at $132.59.
US crude oil stocks fell for a fifth week in a row, in line with expectations, as a rise in refinery demand offset an increase in imports, the government said in its weekly report.
Distillate stocks, which include heating oil and diesel, rose by 2.6 million barrels, exceeding forecasts of a rise of 1.8 million barrels.
Gasoline stockpiles fell 1.2 million barrels, compared with predictions of a rise of 0.8 million barrels.
Oil had rallied over $135 earlier on news Nigeria's oil workers union said it will consider going on strike if talks with Chevron in a dispute over the transfer of the company's expatriate managing director fail by the end yesterday. Oil traders said the market was also waiting to see the impact of news that Saudi Arabia was poised to pump oil at its fastest rate in decades next month.
"People are wondering whether the extra Saudi oil will pop the price bubble," said Christopher Bellew of Bache Financial.
Protests
The relentless rise in oil, which has pushed prices nearly 40 per cent higher since January this year, has led to protests across the world and has alarmed governments worried about its impact on their economies.
Oil prices are up nearly sevenfold since 2002 on strong demand from emerging economies such as China. A surge in speculative buying by investors hedging against inflation and the weak dollar has accelerated the rally this year.
While Saudi moves to dampen markets by pumping more oil, US and British regulators unveiled a plan to slap position limits on US crude contracts on the London-based ICE exchange to rein in speculators.
The combined effort among Saudi Arabia, the US and Britain could rattle some investors and bring down prices, analysts said.
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