Oil prices eased on Tuesday as investors focused on expectations of another rise in US crude inventories, a day after a flow of new fund money and supply concerns over Nigeria and Iran sent futures to a two-month high.
US light sweet crude for May delivery settled down 51 cents
at US$66.23 a barrel, fading further from Monday's peak of US$67.90, which was a two-month high. In London, Brent crude was down 45 cents at US$66.39 a barrel.
A wave of fund buying on Monday lifted the market amid concern about Iran's dispute with the West over its nuclear work and the prolonged loss of a quarter of Nigeria's production. This helped push US crude toward last year's record high of US$70.85.
"Today, everyone has moved off those two stories a bit," said Deborah White of SG SIB Commodities in Paris. "We're expecting a build in crude, so it's hard to simultaneously say crude is desperately short and US stocks continue to build." The US government will release weekly petroleum inventory figures on Wednesday. In an expanded Reuters forecast, analysts predicted the report would show a rise of 1.1 million barrels in crude stocks in the world's largest fuel consumer. Inventories of distillates were expected to fall by 1.6 million barrels and petrol by 1.6 million barrels. EIA/S
"The oil market has been wrestling with a slightly easier fundamental picture in the near term and a longer-term concern about event risk," said Michael Coleman, managing director of Singapore-based hedge fund Aisling Analytics.
Commodities have rallied over the past week as investors alloted more funds to the sector at the start of the second quarter, pushing copper and zinc to new highs and giving a fresh lift to oil prices weighed down by rising inventories.
"There's money coming in -- and it's big money," said Leo Drollas, deputy executive director of the Center for Global Energy Studies in London. "These flows are huge." While US crude supplies recently touched a seven-year high, dealers were still anxious that the cut to Nigerian exports and growing demand heading into the summer driving season may erode inventories in the next few months.
Nigerian Minister of State for Petroleum Edmund Daukoru said on Monday that Royal Dutch Shell would restart its offshore 115,000 barrel-per-day EA field in days. That would still leave more than 400,000 bpd of production off line.
Oil industry and military officials said that additional naval patrols in the Niger Delta had not convinced Shell to restart its onshore Forcados production after a wave of militant attacks in the world's eighth-largest exporter.
The Organisation of the Petroleum Exporting Countries, source of more than a third of the world's oil, will meet informally during talks between oil consumers and producers in Qatar starting on April 22.
But ministers say the cartel has little choice but to keep pumping at near full throttle, with prices nearing the US$70 mark.
- REUTERS
Oil prices eased on Tuesday as investors focused on expectations of another rise in US crude inventories, a day after a flow of new fund money and supply concerns over Nigeria and Iran sent futures to a two-month high.
US light sweet crude for May delivery settled down 51 cents
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