Oil prices rise on supply concerns, positive US dataAugust 18 2012, 3:20pm
Crude oil futures were on the rise this week with the West Texas Intermediate (WTI) benchmark in the US tacking on more than US$3 per barrel, driven by concerns about a decline in oil supplies from the North Sea due to maintenance works and bullish US inventories data.
The Department of Energy on Thursday reported a drop of 3.7 million barrels in America’s crude stocks compared with the 1.5 million barrel drop projected by Platts.
Earlier in the week, the American Petroleum Institute (API) said oil inventories in the US climbed 2.8 million barrels.
In addition, oil prices got a boost from expectations of a sharp fall in oil production in the North Sea in September and positive US retail sales data, which showed the first increase in four months.
The Commerce Department said sales climbed 0.8 percent to nearly US$404 billion in July following a 0.7 percent drop in June. This was also the biggest monthly gain since February this year.
Late in the week, oil prices fell sharply after the UK government revealed that it was preparing to ask the International Energy Agency (IEA) to tap into its strategic reserves to bring down oil prices.
A spokesman for the energy ministry told Reuters that the market remained very tight and “this has a knock-on impact on the oil price and therefore the global economic recovery”.
He also noted that no decision has been made whether to release oil stockpiles.
In addition, the US government confirmed that it was mulling an oil release.
US light, sweet crude for September delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), ended the week at 96.01/barrel.
October Brent crude closed at US$113.71/barrel on the ICE Exchange yesterday.