North Slope crude hits $37.48, a 12-year high

www.petroleumnewsalaska.com Petroleum News Alaska Staff

North Slope crude hit $37.48 per barrel on March 12, reaching a 12-year high according to Alaska Department of Revenue records.

The spike occurred after the U.S. Department of Energy announced oil inventories had dropped to 269.8 million barrels the week before, the lowest number in almost 28 years.

The shortfall came as Venezuela, the world’s fifth-largest oil producer, continues to struggle to rebuild oil production after a general strike. The South American country’s pre-strike production had been 3 million barrels a day. Lacking that output, U.S. imports fell 12 percent for the week ending March 7 to 7.62 million barrels.

The news came as oil traders worry that supplies will be further disrupted if there’s a war in Iraq. Conflict in the Persian Gulf could not only end Iraq’s exports of 1.7 million barrels a day but could also threaten exports from other major producers such as Saudi Arabia.

Lawrence Eagles, an analyst with GNI-Man Financial in Belfast, was quoted in news reports as saying, “It shows that the U.S. market is still undersupplied by about one million barrels per day.”

Prices fell slightly on March 13 On March 13, news reports said oil prices fell by approximately 4 percent following news that the United States’ efforts to garner support for a new U.N. resolution on Iraq could extend into the week ending March 21, potentially further delaying a Middle East war.

News that Japan plans to sell 300,000 barrels per day from its state reserves should U.S.-led forces begin attacking Iraq, according to a Nihon Keizai Shimbun report, added to the March 13 slide, news reports said.

DOE said there were also sharp drops in U.S. gasoline inventories, which would normally be growing as stockbuilding starts for the summer driving season.

News reports said analysts expected the March 13 drop to be short-lived.