Crude keeps climbing on surprise US stock falls

14 August 2008 10:57  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures rose by more than $1/bbl on Thursday, as prices continued to climb after US supply data revealed unexpected large declines in product and crude stocks.

At 08:26 GMT on Thursday, September ICE Brent futures were trading at $114.85/bbl, up $1.38/bbl on the close, having earlier risen to a high of $114.89/bbl, up $1.42/bbl.

At the same time, September NYMEX light sweet crude futures were trading at $117.22/bbl, up $1.22/bbl on the previous settlement level of $116/bbl, having earlier hit a high of $117.42/bbl, up $1.42/bbl.

US inventory data released on Wednesday by the Energy Information Administration (EIA) showed a much larger than anticipated draw on gasoline of 6.4m bbl and an unexpected sharp decline in distillate inventories of 1.7m bbl.

Crude stocks also fell by a more-than-expected 400,000 bbl.

Analysts had forecast that this week’s US stock data would show draws on gasoline of around 2.1m bbl, but a build on distillate of around 1.9m bbl. Crude stocks had been expected to fall by about 200,000 bbl.

Supply worries triggered by the conflict between Russia and Georgia added further support.

The US has started to deliver aid to Georgia after a ceasefire was announced between the two nations. Georgia is an important transit hub for the export of Azeri crude from the Caspian region into western Europe.

Repairs were reported to have started on a Turkish section of the key 1m bbl/day Baku-Tbilisi-Ceyhan (BTC) pipeline, which had been damaged by an explosion and fire last week. It was unclear when the pipeline will reopen.

Exports from the Georgian ports of Batumi and Supsa have been disrupted due to the conflict with flows along the 90,000 bbl/day Baku-Supsa oil pipeline suspended.

Major Caspian producers Kazakhstan and Azerbaijan said on Monday that they were suspending oil supplies via Georgia.

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By: James Dennis
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