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Oil prices steady at $63 per barrel

Crude oil prices were little changed on Wednesday after falling more than $2 a barrel in the previous session.

india Updated: Feb 08, 2006 08:36 IST
Gillian Wong (AP)
Gillian Wong (AP)

Crude oil prices were little changed on Wednesday after falling more than $2 a barrel in the previous session ahead of the release of US oil inventory data expected to show that stockpiles have increased.

Light, sweet crude for March delivery fell 3 cents to $63.06 a barrel in Asian electronic trading on the New York Mercantile Exchange midmorning in Singapore. The contract fell $2.02 on Tuesday to settle at $63.09 a barrel.

Heating oil rose 0.42 cent to $1.6960 a gallon (3.8 litres) while gasoline gained 0.20 cent to $1.5960 a gallon.

US weekly inventory data to be released Wednesday was expected to show gasoline supplies rose by 1.6 million barrels and crude-oil supplies rose by 8,60,000 barrels, putting crude stocks about 9 per cent higher than last year's level, PVM Oil Associates in Vienna said on Tuesday.

The US Department of Energy's Energy Information Administration on Tuesday revised its forecast of global demand in the first quarter to 85 million barrels a day-- 3,00,000 barrels a day lower than predicted a month ago.

US oil demand in the first quarter was revised downward by 2,20,000 barrels a day to 20.67 million. Fears over possible disruptions to the Iranian oil supply because of its nuclear ambitions took a back seat to the sense that overall, energy supplies are ample.

The International Atomic Energy Agency board of governors voted on Saturday to report Iran to the UN Security Council, which can impose sanctions, over its nuclear program.

Tehran responded by saying it would start full-scale uranium enrichment and bar surprise inspections of its facilities.

Iran removed some UN seals from its main uranium enrichment facility in central Iran on January 10 and resumed research on nuclear fuel after a 2 1/2-year freeze.

It insists it only wants to generate electricity, but the United States and some of its allies contend Tehran is trying to build a weapon.

In other market-related news, a state-run oil company in Ecuador suspended operations of one of its two main oil pipelines on Tuesday after some 60 protesters seized a pumping station to demand the government cancel US oil firm Occidental Petroleum Corp's contract.

Petroecuador said in a statement that the decision to suspend pipeline operations was "a measure for prevention and security."

Ecuador is the fifth-largest producer of crude oil in South America. More than half of its exports go to the United States. Meanwhile, Nymex natural gas advanced 3.7 cents to $7.895 per 1,000 cubic feet.

First Published: Feb 08, 2006 08:36 IST