November 16, 2004
Reuters
Yahoo News
LONDON (Reuters) - Oil prices steadied on Tuesday from steep recent losses as traders remained wary over lean heating fuel stocks ahead of the northern winter.
U.S. light crude rose 32 cents to $47.19 a barrel, down around $8.50 from a record $55.67 in late October. London Brent crude was up 44 cents at $43.48 a barrel.
Strong production from the OPEC cartel and slowing demand growth has helped to replenish consumers' inventories and prompted speculative funds to shift money out of oil following a 40 percent price rally this year.
U.S. crude inventories have risen by 22 million barrels, or 8 percent, in the past seven weeks and analysts predict another 1.9 million barrels rise when the government releases its weekly supply status report on Wednesday.
But heating oil inventories in the big consuming markets of the United States, Germany and Japan are much lower than normal for the time of year, spurring fears of a supply squeeze should winter hit early or hard.
U.S. distillate stocks, including heating oil, are expected to climb by 900,000 barrels as refineries crank up production at the end of the maintenance shutdown season.
Temperatures in the key heating-oil consuming region of the U.S. Northeast have been below normal in recent days, but were expected to warm this week before dropping the following week.
OPEC's high sulfur, or sour, grades of crude oil have sunk even faster than international benchmarks. The cartel's reference crude oil basket has fallen to its lowest level since mid-July at $36.11.
OPEC's second top producer Iran believes cartel members needs to cut production back to official quota levels to bolster prices for its lower-quality crude supplies, an Iranian oil official said on Tuesday.
The 10 OPEC members with quotas pumped 27.89 million barrels per day (bpd) in October, 890,000 bpd above a ceiling that came into force on November 1, a Reuters survey found.
"We are cautioning producers to be more vigilant and fully adhere to quotas," said an Iranian oil official. "Members should think of trimming production to the level of quotas."
Iraqi oil infrastructure continued to come under attack by saboteurs, who blew up five oil wells west of the Kirkuk oil center on Monday and set fire to a storage tank at a pumping station along the main export pipeline to Turkey.
Flows through Iraq's northern oil export pipeline have fallen to 200,000 barrels per day after the attacks and could remain below capacity for over a month, an oil official said on Tuesday.
Iraq was pumping around 500,000 bpd through the northern pipeline to Turkey earlier this month.
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