Thursday June 18, 12:59 PM
Oil prices climb on lower stockpiles
LONDON (AFP) - Oil prices rose Thursday after a sharp drop in US crude reserves and unrest in oil exporters Iran and Nigeria, traders said.
New York's main futures contract, light sweet crude for delivery in July, advanced 33 cents to 71.36 dollars a barrel.
Brent North Sea crude for August delivery was up 32 cents at 71.17 dollars.
Analysts said a sharp decline in US crude inventories showed energy demand was partly improving in the United States, the world's biggest energy consumer.
The weekly US Department of Energy (DoE) report released Wednesday showed crude stockpiles falling for the second week running, by 3.9 million barrels, far sharper than analysts' predictions.
The data was "a mixed bag," said ODL Securities analyst Marius Paun said on Thursday.
"A larger than expected draw in crude inventories signalled rising demand but supply remained still abundant with the surplus way over the five years averages, helped by a much larger-than-anticipated build in gasoline stocks."
Paun said that after "crunching the numbers, market participants decided to (buy) ... crude, encouraged also by a weaker US dollar.
"The effect was a rebound in price ... but further runs into high territory will probably need the assistance of additional weakening in the dollar and, or extended gains in the equities market."
The market was also following developments on the political front.
In oil-producing Iran, the country's opposition plans a day of street marches and mourning for protesters killed in post-election violence, keeping up the pressure on the Islamic regime over the disputed vote.
Facing their biggest crisis since the 1979 revolution, the country's Islamic rulers have gone on the offensive, arresting protesters and prominent reformists, tightening their grip on the media and lashing out at "meddling" by foreign foes, including the United States.
In Nigeria meanwhile, a key African oil exporter, militants said they had destroyed a major crude pipeline belonging to Royal Dutch Shell (Amsterdam: RDSA.AS - news) as they continued their campaign against foreign companies.
Shell (LSE: RDSB.L - news) has been a regular target of attacks by militants in southern Nigeria over the past three years, forcing it to shut down some facilities and defer contractual obligations to clients.
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