• Home
• /
• Business

Oil rises more above $62 as IEA warns on stocks

LONDON - Oil pushed further above $62 on Thursday after the International Energy Agency said OPEC has tightened output too much and in response to a steep fall in gasoline stocks in top consumer the United States.

US crude was up 66 cents at $62.67 a barrel by 1235 GMT, after it settled up 12 cents on Wednesday. London Brent rose 67 cents to $68.51 ahead of its expiry on Friday.

“OPEC supply curbs since last autumn have coincided with two quarters of heavy OECD stock draws and output remains below the level needed to generate the usual spring crude stock build,” said the IEA, energy adviser to 26 industrialised nations.

Current OPEC production -- the group agreed cuts totalling 1.7 million barrels per day at two meetings late last year -- could mean further tightening in stocks in the months to come, given little spare capacity and apparently sharp draws in commercial inventory since the last quarter of 2006, it said.

Sharply falling United Sates gasoline stocks shown in government data on Wednesday added to the tight outlook.

“The market probably tipped a bit higher on the relatively bullish IEA market report,” said Harry Tchilinguirian of BNP Paribas. “I think more importantly the market is still focused on what is happening in US statistics, though we’re still puzzled as to the strength of the numbers.”

The figures showed gasoline stocks in the world’s top consumer slid 5.5 million barrels last week ahead of the peak summer demand season, far more than a 1.4 million-barrel drop analysts had forecast and taking stocks nearly 5 percent below the same time last year.

Weekly demand for gasoline in the United States reached a new record for April despite higher prices, the government said.

Crude prices are up over 20 percent from this year’s low of $49.90 a barrel in January despite a 6 percent plunge in the past week as Iran released 15 British military personnel.

Traders are still keeping a close eye on tension between the West and Iran.

On Wednesday, a top Iranian official dismissed doubts over Tehran’s recent declaration it had begun industrial enrichment of uranium, a process the West believes could lead to making bombs rather than the nuclear fuel Iran says it needs.

Iran was still at the initial phase of enrichment, the head of the International Atomic Energy agency said on Thursday. But Mohamed Elbaradei stressed concern was focussed on the Islam republic’s intentions.

Worries over Iran have helped lift London Brent crude to a record premium of around $6 a barrel this week against US crude.