NEW YORK (AFP) — Oil prices rebounded Wednesday after news of a drop in US inventories and new concerns about a possible strike in key producer Nigeria.
Prices had dropped earlier as the market mulled a possible output hike by OPEC kingpin Saudi Arabia.
New York's main oil futures contract, light sweet crude for July delivery, jumped 2.67 dollars to close at 136.68 dollars per barrel.
Brent North Sea crude for August delivery advanced 2.72 dollars to settle at 136.44 dollars.
The weekly report from the US Energy Information Administration revealed that crude reserves had fallen by 1.2 million barrels to 301 million barrels for the week ending June 13.
Analysts had foreseen a bigger decline of 1.7 million barrels but the difference was not deemed overly significant.
Stocks of gasoline (petrol) were down 1.2 million barrels, compared with forecasts of an increase of 850,000 barrels, while distillates rose 2.6 million barrels, against predictions of an increase of 1.8 million barrels.
The inventory report was "somewhat mixed," said Eric Wittenauer at Wachovia Securities.
"The overall shape of the report was not too far off expectations, although the distillates build was a little larger than expected and the gasoline stocks fell instead of rising," said Citigroup analyst Tim Evans.
"The weak gasoline demand blunts some of the impact from the drop in stocks."
Some said fears of a strike in Nigeria pushed up prices after a union in the African nation failed to reach an agreement with US producer Chevron.
Analysts have expressed doubt about whether the planned Saudi output hike would lower oil prices in the long-term amid fierce demand from Asian powerhouse economies China and India.
Global finance officials fear that soaring crude oil prices pose a threat to world economic growth as higher inflation leads central banks to raise interest rates.
"Oil prices remain stubbornly firm, even as calls for some solutions mount and resistance by consumers builds," said John Kilduff at MF Global.
"Attempts by the Saudis will only reveal diminishing capacity. Capacity in the rest of the cartel appears to be mostly employed, as well ... participants seem to be showing an unmistakable tenor of very high uncertainty, evidenced by the rapidity of directional shifts."
Copyright © 2009 AFP. All rights reserved. More »
