Oil prices rise again after a two dollar spike

26-Oct-06

Crude oil prices rose on Thursday, following a two dollar jump in response to a report showing a drop in U.S. inventories last week. OPEC's steps to cut production by 1.2 million bpd and attacks on oil facilities in Nigeria also helped prop up prices. Light, sweet crude for December delivery rose to US$61.65 a barrel in Asian electronic trading on the New York Mercantile Exchange. Heating oil futures rose to US$1.7435 a gallon on the Nymex, while gasoline futures dropped marginally to $1.5920 a gallon. Saudi Arabia, the United Arab Emirates and Iran have begun informing customers that they are going through with the cuts. Though global market is relatively well supplied, OPEC's willingness to go through with the 1.2 million bpd reduction is a precursor to tight supplies going into the winter, when fuel demand is at its peak. Crude oil stockpiles fell by 3.3 million barrels to 332.3 million barrels in the week ending Oct. 20. Distillate stocks, which include heating oil and diesel fuel, fell by 1.4 million barrels to 144 million barrels, and gasoline supplies dropped by 2.8 million barrels to 207.4 million barrels.