THE NEW YORK TIMES: Oil Edges Up Near $66 on Supply Worries: “Protesters in major exporter Nigeria ended a week-long siege of oil facilities on Monday, to pave the way for talks with Royal Dutch Shell over compensation for an oil spill and fire in 2003. Such protests underlined fears over global supply security and refining constraints that have helped keep U.S. oil at an average of $53.79 this year versus $41.47 in 2004.”: Tuesday 23 August 2005
Published: August 23, 2005
Filed at 2:15 a.m. ET
SINGAPORE (Reuters) - Oil prices inched up toward $66 on Tuesday as fears over persistent global supply disruptions countered recovering output from Ecuador and an expected slight increase in U.S. crude stocks.
U.S. light crude was 20 cents higher at $65.85 a barrel by 0527 GMT in the new front-month October contract, after September expired on Monday up 10 cents at $65.45. London Brent crude rose 20 cents to $64.70 a barrel.
A series of production outages had overshadowed more comfortable crude stock levels in the United States and pushed the market back toward record levels above $67 early this month.
Production in Ecuador was recovering but remained around two-thirds of its 530,000 barrels per day (bpd) level late on Monday, as the government and oil companies came close to a deal with protesters who crippled output last week.
Protesters in major exporter Nigeria ended a week-long siege of oil facilities on Monday, to pave the way for talks with Royal Dutch Shell over compensation for an oil spill and fire in 2003. Such protests underlined fears over global supply security and refining constraints that have helped keep U.S. oil at an average of $53.79 this year versus $41.47 in 2004.
Dealers were also relieved to see Iraq's southern oil exports of some 1.5 million bpd restart on Monday after being stopped for 10 hours by a power cut.
``The situations in Ecuador and Iraq seem to be improving,'' said Naohiro Niimura, derivatives vice president at Mizuho Corporate Bank.
``Still, the market will rise again on a long-term basis toward winter as it responds to news that raises any supply crunch.''
With some crude production in the UK North Sea and India also offline, dealers worry OPEC -- already pumping nearly flat out -- will strain to make up any unexpected outages.
Tropical storm Jose, the 10th of an unusually heavy Atlantic hurricane season, neared land in Mexico and reminded traders that the peak September storm period is yet to come and could cause further output disruption in the Gulf of Mexico.
On the downside, analysts polled by Reuters expected U.S. crude oil inventories to have edged up 200,000 bpd last week in government data due on Wednesday.
``Most market participants expect bearish U.S. oil stocks data tomorrow in terms of crude inventories,'' Niimura said.
Worries that higher oil prices could eat into economic growth and the looming end of the peak driving season in the United States could also cause a downturn in market sentiment.
Gasoline stocks in the world's largest consumer are still expected to fall 0.9 million barrels on strong demand.
U.S. heating oil stocks are forecast to have risen for the 14th week as refiners take advantage of hefty production margins and look ahead to peak fuel demand in the northern hemisphere's winter.
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