NYMEX crude trims gains as US pushes near Baghdad

Reuters, 04.03.03, 1:08 PM ET NEW YORK (Reuters) - NYMEX crude oil futures slipped off session peaks Thursday afternoon as players took some profits amid news that U.S.-led forces were pushing closer to Baghdad. Crude's movement was partly influenced by some selling on gasoline futures, which surged earlier following heavy losses on Wednesday, traders said. "The longs stuck with their positions for a while. But right now, with gasoline giving up some gains, those people are taking some profits on crude also," said a NYMEX floor trader. At 1255 EST (1755 GMT), NYMEX May crude was up 24 cents at $28.80 a barrel, trading $28.30 to $29.24. In London, May Brent crude traded at $25.51 a barrel, up 30 cents, below its session high of $25.87. NYMEX May gasoline was up 0.46 cent at 86.85 cents a gallon, below its session high of 88.25 cents. The morning low was 86.10 cents. Traders expect the market's general decline to persist as optimism is growing that the war with Iraq would end quicker than earlier speculated. U.S. armored units moved on Thursday to about 10 km (six miles) from the edge of Baghdad and planes hit targets in and around the Iraqi capital in preparation for an assault on the airport. Parts of four elite Iraqi Republican Guard divisions were moving south, U.S. officers said, setting up a potential showdown for the capital. But U.S. and British political and military leaders said urban warfare in Baghdad could be prolonged and bloody and refused to be drawn on when they might authorize a final push to capture the city of five million people. The day's gains are being limited by data showing a big rise in U.S. crude supplies last week. Surging imports from Saudi Arabia lifted U.S. crude inventories nearly 7 million barrels to 280.7 million barrels, in the week to last Friday, government data showed on Wednesday. Growing deliveries from Venezuela, which was crippled by a two-month strike that began in December, also added to last week's inventory build. U.S. Energy Secretary Spencer Abraham said Thursday the rise in inventories was a "positive sign" of adequate supply. He said there was no need to use the U.S. Strategic Petroleum Reserve due to the Iraq and Nigeria disruptions, because they won't cause a "severe" interruption. OPEC-member Nigeria's internal ethnic unrest that continues to disrupt almost 40 percent of the country's 2.2 million bpd crude oil output remains supportive, traders said. "We look for nearby futures to settle into the 27.50-29.50 range into next week," said Jim Ritterbusch of Ritterbusch & Associates in a research note. "A renewed push back to above the $30.00 area is still possible but will require an extended loss of Nigerian output." NYMEX May heating oil futures were 0.89 cents higher at 72.75 cents a gallon, trading 71.30 to 73.70 cents.