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Oil edges up after sell-off on swelling US stocks


SINGAPORE, Dec 8 (Reuters): Oil nudged higher today after tumbling the day before on news of surprisingly robust US crude and fuel inventories, a decline limited by a new al Qaeda threat against oil exports and an ongoing cold snap in the Northeast.
US crude CLc1 traded up 22 cents at $59.43 a barrel, having settled 73 cents lower at US$59.21 Wednesday, ending a five-session rally that had boosted prices by 6.0 per cent.
Prices once again failed to establish a foothold over $60 a barrel after US government data revealed an unexpected 2.7 million barrel rise in crude stocks to 320.3 million barrels last week, putting them 11 per cent higher than a year ago.
Wednesday's data also showed higher-than-expected rise of 2.7 million barrels in both gasoline and distillate stocks. Heating oil stockpiles also rose to stand nearly 14 per cent above their year-ago level, sending prices spiralling lower.
Stocks have rebounded strongly since a string of hurricanes wreaked havoc on production platforms and refineries earlier this year, a build-up helped in part by a mild start to the northern winter, which has curbed demand for heating fuels.
Brimming storage tanks forced the Louisiana Offshore Oil Port, the only US offshore port that can handle supertankers, to turn away some crude shipments Wednesday.
Still, analysts said it would be difficult to disrupt the well-protected fields and terminals of major exporters like Saudi Arabia and Kuwait. There have never been any direct attacks on Saudi oil facilities, despite repeated threats.
And forecasts of below average temperatures extending into next week in the US Northeast, the world's biggest heating oil market, also saw traders hold onto positions on fears a cold winter could soon deplete healthy stockpiles.
Attention now turns to next week's Organisation of Petroleum Exporting Countries (OPEC) meeting in Kuwait, at which the cartel will discuss supply policy. A number of OPEC ministers have come out and said they are comfortable with current prices and see no need to adjust production.
The OPEC has been pumping at around 30 million barrels per day, near capacity, for much of 2005 in an effort to build up a large cushion of stockpiled crude and moderate prices.