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CRUDE
oil was little changed near $122 a barrel in New York
after rising to a record Tuesday on concern supply from
Nigeria may be disrupted and speculation that high oil
prices won’t stall Asian demand.
Royal
Dutch Shell Plc. said a militant attack over the weekend
damaged a pump station in Nigeria, where violence has
cut exports from Africa’s biggest oil producer. Rising
crude will do little to stop worldwide demand because of
Asian economic growth and subsidies given to the
consumer, the International Energy Agency (IEA) said.
“The
bigger picture is supply is not keeping up with demand,”
said Anthony Nunan, an assistant general manager for
risk management at Mitsubishi Corp. in Tokyo. “It
becomes politically difficult to lower the subsidies the
higher the prices are.”
Crude
oil for June delivery was at $121.75 a barrel, down 9
cents, at 1:19 p.m. in Singapore in after-hours trading
on the New York Mercantile Exchange. On Tuesday oil
climbed to an intraday record of $122.73 a barrel.
Futures advanced $1.87, or 1.6 percent, to settle at
$121.84 a barrel, the highest close since trading began
in 1983. Prices have surged 98 percent from a year
earlier.
Supply
shortfalls will probably send oil to between $150 and
$200 a barrel within two years, Goldman Sachs Group Inc.
analysts, led by Arjun N. Murti, said in a report.
Fuel
subsidies
Subsidies in
China,
India
and oil-producing countries will combine with strong
economic growth in those areas to support demand even
with rising prices, Fatih Birol, chief economist at the
IEA, told a panel at the energy industry’s Offshore
Technology Conference in Houston. That runs counter to
history, which saw demand fall 2 percent during the high
prices of 1973 to 1974, and 7 percent from 1979 to 1981,
he said.
“We
shouldn’t expect too much from the price, in terms of
bringing demand down,” he said. “China
and India are transforming the energy markets by the
sheer size of their populations.”
Chinese
oil consumption will climb 4.7 percent to 7.89 million
barrels a day this year, the IEA said on April 11.
Global demand will rise 1.5 percent to 87.23 million
barrels a day, the IEA said. The Paris-based agency is
an adviser to 27 industrialized nations.
Brent
crude oil for June settlement was at $120.16 a barrel,
down 15 cents, on London’s ICE Futures Europe exchange
at 12:50 p.m. Singapore time. On Tuesday, the contract
touched $120.99, a record intraday price.
Opec
output
Opec
pumped an average 32.105 million barrels of crude oil a
day last month, down 320,000 barrels from March,
according to a Bloomberg News survey of oil companies,
producers and analysts.
Nigerian
output declined 160,000 barrels to 1.88 million barrels
a day, the lowest since August 1999, the survey showed.
US
gasoline demand typically peaks from Memorial Day on May
28 through Labor Day in September as summer holiday
travel puts cars on the road. Monthly fuel sales were
the highest during August in five of the last six years,
according to data from the Department of Energy.
“Demand
for gasoline will definitely pick up in the summer,’”
Victor Shum, senior principal at consultant Purvin &
Gertz Inc. in Singapore, said in a television interview
with Bloomberg. “We’ve also got the hurricane season
coming up and we could be facing a confluence of bullish
factors.”
The
North Atlantic hurricane season, which can disrupt oil
production, shipments and processing along the Gulf of
Mexico coast, runs June through November, with September
being the busiest month and accounts for a third of all
storms formed annually, according to National Hurricane
Center records.
Gasoline
for June delivery rose to a record $3.126 a gallon
yesterday on the New York Mercantile Exchange amid a
surge in oil prices and forecasts that U.S. inventories
haven’t rebounded from an 11 percent drop since early
March. It traded at $3.1015 at 11:02 a.m. Singapore
time. (Bloomberg) |
