Oil holds at $60 on concern over supply hitches

TOKYO - Oil prices held around $60 a barrel on Thursday, as traders worried about supply hitches at US oil refineries and pipelines ahead of data expected to show that winter demand cut heating fuel inventories in the top consumer.

By (Reuters)

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Published: Thu 22 Feb 2007, 2:26 PM

Last updated: Sat 4 Apr 2015, 8:29 PM

US crude for April delivery was down 5 cents at $60.02 a barrel by 0740 GMT, after gaining $1.22 on Wednesday. London Brent crude for April was down 5 cents at $59.30.

A key fuel pipeline supplying the US Northeast with gasoline and diesel has shut down due to a spill, following on from North American refinery fires and raising supply concerns ahead of peak summer driving demand.

US distillate supplies were expected to be down 2.9 million barrels as a freeze last week kept heating oil furnaces burning, while gasoline stocks were seen rising just 100,000 barrels in data due later on Thursday, a poll of analysts found.

“With the crude side of the market looking increasingly tight, and demand in the US growing at a very robust pace, we think the trend of faster than normal falls in inventory levels is likely to remain in place,” said Barclays Capital.

The pipeline’s operator TEPPCO said on Wednesday it could restart the downed portion of its 240,000 barrels per day (bpd) oil products line by Saturday, if repairs go as planned.

A fire over the weekend at leading US refiner Valero Energy Corp.’s 170,000 bpd Texas refinery was expected to keep the plant shut for several weeks, one of a slew of refinery problems in North America.

Crude supplies will also be trimmed after BP said it shut its 47,000 bpd Northstar oil field in the Beaufort Sea off Alaska for unplanned repairs that could keep it out of service until next week.

Also providing support for prices — which have climbed from a slump below $50 in mid-January — has been increased tension between Iran, the world’s fourth-largest oil exporter, and the West over its nuclear programme.

Iran will continue with its nuclear programme, President Mahmoud Ahmadinejad said on Wednesday, the day of a U.N. deadline for Tehran to freeze its uranium enrichment.

Tensions are also rising in fellow OPEC member Nigeria, ahead of April elections. Militant attacks have already shut a fifth of output.

OPEC next meets in Vienna on March 15 when it will probably leave its supply levels unchanged, Nigeria’s energy minister said on Wednesday.

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