World oil prices rose on Monday as traders worried about possible supply shortages amid anticipated higher levels of demand for gasoline ahead of the peak driving season starting in the United States later this month, dealers said.
New York’s main contract, light sweet crude for delivery in June, added 20 cents to $50,97 per barrel in electronic deals.
In London on Thursday, the price of Brent North Sea crude oil for delivery in June gained nine cents to $51,05 per barrel.
”Support for oil prices is coming from a feeling that oil stocks may not be high enough for the peak demand season in the US later in the year, and concern that much of the crude oil stocks are made up of sour crude, which yields less gasoline,” analysts at the Sucden brokerage firm said.
The market focus was shifting to gasoline — or petrol — as many Americans prepared to take to their cars for the summer vacations, traditionally beginning on the US Memorial Day holiday on May 30.
Investors were also betting on a decrease in gasoline reserves when the US Department of Energy releases its weekly inventory report on Wednesday.
”I think we could see a slight drawdown in gasoline stocks this week,” said Mark Pervan, a commodities analyst with Daiwa Securities in Melbourne. ”So, the market is making its decision ahead of that.”
The Department of Energy said last week gasoline supplies for the week ending April 29 rose by 2,2-million barrels to 213,5-million, comfortably beating market expectations of an increase of 750 000 to 875 000 barrels.
The president of the Organisation of Petroleum Exporting Countries (Opec) said on Monday that the oil market is oversupplied and that any increase in output at the cartel’s meeting next month must take into consideration prices and growth in demand.
”The Opec-10 real production now in the market based on our latest information from Opec and other sources is 29,7-million barrels per day,” Sheikh Ahmed Fahd al-Sabah told reporters.
”We believe there is two million barrels per day of overproduction in the market … In the third quarter, the required demand from Opec-10 will be 28,5-million barrels per day,” added Sheikh Ahmed, who is also Kuwait’s Energy Minister.
Comments over the weekend by Iran’s Oil Minister, Bijan Namdar Zanganeh, that Opec should consider the price situation before agreeing any further hike in their production ceiling, were also bolstering prices on Monday, Pervan said.
”Those sort of comments would have lent support to the market,” he said.
The Iranian oil minister was quoted as saying on the sidelines of an international petrochemical conference in Tehran that Opec is already producing about two million barrels per day over quota.
”The market situation is good and the prices are going in a moderate direction,” he said. — Sapa-AFP