With supplies rising, oil prices fall more than $2
WASHINGTON – Oil prices fell by more than $2 a barrel Monday, maintaining downward momentum from late last week after OPEC lowered its demand forecasts and U.S. crude oil inventories grew. Even sabotage to an oil pipeline in Nigeria couldn’t rouse the bulls.Light sweet crude for April delivery dropped $2.35 to settle at $60.42 a barrel on the New York Mercantile Exchange, leaving prices roughly 7 percent higher than a year ago.Oil analyst John Kilduff of Fimat USA in New York said that given the multitude of geopolitical concerns in the market it will be difficult for prices to fall much below $60 a barrel in the near term.On the flip side, the high level of crude oil inventories in the United States makes it difficult for prices to rise much above $63, said Tom Bentz, a broker at BNP Paribas Commodity Futures.Italian oil company Eni SpA said Monday that its production in Nigeria would will drop by about 13,000 barrels per day while it repairs a pipeline sabotaged last week, presumably by militants seeking a greater share of the country’s oil wealth. The Nigerian government has dismissed the militants as criminals and oil thieves.Repairs on the Tebidaba-Brass pipeline, in the Niger Delta, will begin this week and should be completed by the end of March, Eni said in a statement. Normally the line carries 75,000 barrels per day.Nymex gasoline futures fell by 3 cents to close at $1.8301 per gallon (3.8 liters). Heating oil futures slid 3.96 cents to close at $1.7417 a gallon, while natural gas futures fell 21.8 cents to finish at $6.835 per 1,000 cubic feet.The Organization of Petroleum Exporting Countries lowered its forecast Friday for global oil demand growth in 2006 by 110,000 barrels a day. OPEC, which cited lower consumption in the U.S. and Asia, said its prediction comes after signs of larger oil inventories in the U.S., along with higher demand in January and February.OPEC set oil demand growth for this year at 1.46 million barrels a day and demand for the year at 84.5 million barrels a day. This brings its estimate in line with recent revisions by agencies such as the International Energy Agency and the Energy Information Administration.According to a Dow Jones Newswires survey of traders, company and industry sources, OPEC pumped almost 30 million barrels a day in February, up a daily 320,000 barrels compared with the previous month.Production from the 10 members excluding Iraq slipped 50,000 barrels a day to 28.07 million barrels a day – not far off the group’s current production ceiling of 28 million billion barrels a day.The U.S. Energy Department’s weekly report last week showed crude oil inventories rose by 4.8 million barrels last week to 339.9 million barrels, or 10 percent above year-ago levels.
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