14 May 2007 - 10:55
  • News Code: 104597

SINGAPORE - Oil prices were slightly lower in Asian trading hours in a market focussed on tightness in US gasoline supplies, dealers said.

At 11.23 am here (0323 GMT), the New York Mercanitle Exchange"s main oil futures contract, light sweet crude for delivery in June, was down 0.07 usd at 62.30 usd per barrel from 62.37 usd in late trading in the US Friday. Brent North Sea crude for June was down 0.07 usd at 66.76 usd.

 

Victor Shum of Purvin and Gertz here said a number of factors were driving the market.

 

"The gasoline price strains provide some support to the crude oil market, although crude oil inventories in the US are at comfortable levels," he said.

 

Last week, US figures showed a surprisingly strong build-up in crude stocks of 5.6 mln barrels and a gain of 400,000 barrels in gasoline reserves -- the first rise since early February.

 

Analysts said the weekly gasoline gain was likely just a blip, because shutdowns and outages continued to restrict refinery capacity.

 

The US is nearing the peak summer driving season, when many people take to the highways for their holidays.

 

Concerns were underscored in the latest monthly report by the International Energy Agency (IEA) which trimmed its projections of global oil demand for this year but warned about gasoline supplies.

 

"With average retail prices in the US near record highs at just over 3.00 usd per gallon several weeks ahead of the start to the summer driving season, concerns over supplies are being raised," the IEA said.

 

Unrest in Nigeria, Africa"s biggest producer of oil, continued to be an issue, with the country having now lost about a quarter of its output because of a series of attacks on facilities in the crude-rich Niger delta.

 

Shum said the situation in Nigeria "provides support to pricing, even though US crude stocks are at a comfortable level."

 

US oil giant Chevron (nyse: CVX - news - people ) said Saturday it was suspending non-essential activity off Nigeria"s oil-rich southern coast after four of its workers had been seized from a construction vessel last Tuesday.

 

More than 150 foreign workers have been kidnapped there since the start of last year, most of them connected to the oil industry.

 

PIN/FORBES.COM

News Code 104597

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