Oil prices rise as Venezuela cuts supplies
LONDON (AFP) — World oil prices headed upwards on Wednesday as traders assessed a move by Venezuela's state oil company PDVSA to cut supplies to US oil giant ExxonMobil.
On a downbeat note, however, the International Energy Agency forecast that the world oil market could be set for a lengthy slowdown, signalling a sharp shift in the climate which pushed the crude prices to 100 dollars last month.
Traders were meanwhile awaiting the latest report on oil stockpiles in number one energy consumer the United States.
On Wednesday, New York's main contract, light sweet crude for delivery in March, gained 19 cents to 92.97 dollars a barrel.
Brent North Sea crude for March delivery rose 43 cents to 93.29 dollars.
"Oil prices were a little firmer (on Wednesday), still drawing a little support from news that Venezuela has cut its supplies to ExxonMobil," said Sucden analyst Andrey Kryucehnkov.
"Venezuela is the fourth-largest supplier of oil to the US."
The country's state petroleum company PDVSA said Tuesday it suspended oil supplies to ExxonMobil in retaliation for the US energy giant's effort to freeze billions of dollars in global PDVSA assets.
In a statement, the Venezuelan oil concern cited "judicial-economic aggression" by ExxonMobil as the reason for its action, which it described as an act of "reciprocity."
The move by Venezuela comes after ExxonMobil, the world's biggest energy company, secured international court orders freezing up to 12 billion dollars in PDVSA assets.
The court orders were issued as part of an international arbitration sought by ExxonMobil to gain compensation for the leftist Venezuelan government's nationalization of key oil fields in the Orinoco basin.
Crude prices had surged higher on Monday after weekend threats by Venezuelan President Hugo Chavez to cut US oil deliveries.
But the market pulled lower on Tuesday as traders took profits after three straight sessions of gains.
On Wednesday, traders also digested the latest monthly review of oil trends from the Paris-based International Energy Agency (IEA).
In light of weaker global economic prospects, the IEA has cut its forecast for world demand for oil this year by 200,000 barrels per day.
It said it expected world demand in 2008 to grow by 1.9 percent instead of 2.2 percent forecast last July.
"Just as the demand shock of 2004 shaped the oil market for the next three years, so too could the pending slowdown," said the agency, which coordinates energy policies for the main industrialised consuming nations.
Later Wednesday, the US Department of Energy releases figures for American crude oil inventories for the week ending February 8.
Market expectations are that US crude reserves will rise by 2.38 million barrels, which would mark the fifth weekly gain in a row.
