Oil prices fall to lowest level since Feb 17

09-Mar-06

World oil prices have fallen to the lowest level since Feb. 17, as U.S. crude oil inventories rose to their highest level since May 1999 and OPEC decided to maintain its output ceiling of 28 million bpd. New York's main contract, light sweet crude for delivery in April, dipped to US$60.02 a barrel. The U.S. Department of Energy announced a rise in crude oil inventories by 6.8 million barrels to 335.1 million in the week to March 3 (10% higher than year ago levels and are at their highest level since May 1999). U.S. gasoline inventories dipped 1.1 million barrels to 224.8 million, sharper than expected. Reserves of distillates fell by 2.7 million barrels to 131.4 million. However, markets continues to worry about Iran's nuclear ambitions, particularly after Iran made a statement to the International Atomic Energy Agency threatening the United States with "harm and pain." Markets were also keeping an eye on the situation in Nigeria, the world's 11th-largest oil producer, where recent attacks have reduced the country's production by 455,000 bpd, about 20% of its output.