Oil Price Slips as Venezuelan Gasoline Arrives
NewsStand - Friday, May 02, 2003 <a href=www.menafn.com>MENAFN-Agence France-Presse NEW YORK, May 2 (AFP)
NEW YORK, May 2 (AFP) - World oil prices slipped Friday as Venezuelan gasoline arrived in the United States and a tense oil rig stand-off in Nigeria neared resolution, analysts said. New York, light sweet crude June-dated futures contract fell 36 cents to 25. 67 dollars a barrel.
In London, the price of benchmark Brent North Sea crude oil for June delivery fell 24 cents per barrel to 23.58 dollars.
"The weakness of the energy market came from the fact that some gasoline is coming up from Venezuela and is landing in the Gulf (of Mexico)," said Refco market analyst Jim Still.
Weak gasoline priced dragged down prices of crude and heating oil, he said. In addition, the second quarter of the year was traditionally marked by weak demand for energy.
Earlier, prices were beaten down in London by as fears eased that labor unrest in Nigeria's oil fields could spiral out of control.
On Friday, a US oil firm whose Nigerian offshore rigs had been hijacked by striking workers since mid-April, trapping 100 Western employees, said it had reached a deal with unions to end the dispute.
Transocean Inc. said it hoped the process of evacuating people from the four rigs would begin "promptly".
Earlier this year, political and ethnic unrest in the country's oil rich Niger Delta region halted around a third of the country's oil exports, pushing world prices upwards.
The markets were also watching for any more action from the Organisation of Petroleum Exporting Countries (OPEC) following the cartel's somewhat botched attempt to ease prices up, analysts said.
At a meeting in Vienna last week OPEC said that its members would cut two million barrels per day of production from the start of June to absorb a glut in crude on world markets after the Iraq war.
However at the same time it raised official production ceilings to bring them closer into line with reality, leading dealers to conclude that little would really change.
Analysts at brokerage Sucden UK said the market had noted remarks from OPEC Secretary-General Alvaro Silva that while the cartel was waiting to see the results of the production cuts, its "does not mean our hands are tied until then".
"These comments show that it is likely that OPEC feel that they did not cut production enough and that with Iraqi production coming back on line prices could drop," the analysts said in a note.
However even this expectation was not sufficient to shore up prices.
Adding to the downwards momentum was anticipation that Iraq's crude could flow back onto world markets relatively soon.
On Wednesday, US Energy Secretary Spencer Abraham told reporters in Saudi Arabia that Iraq could restore its pre-war oil production levels "within months".
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