Oil retreats after two-day rally

SYDNEY – Oil dipped below US$63 a barrel yesterday as traders paused from a two-day rally that added 5 per cent to prices on mounting concerns about US petrol supplies ahead of the summer driving season.

Expectations that heavier-than-normal refinery maintenance likely caused fuel inventories to fall last week limited losses, analysts said. US crude fell 30 cents, or 0,5 per cent, to U$62,80 a barrel after rising 2 per cent to a one-week high a day ago.London Brent dropped 25 cents to US$63,72 a barrel.US petrol futures dropped 1,55 cents to US$1,8505 a gallon, having soared 7 per cent to hit a five-month high on Tuesday.”I think we’re just seeing a bit of consolidation this morning, but the main influence continues to be expectations of a stock drawdown for petrol,” said Gerard Burg, minerals and energy economist at the National Australia Bank in Melbourne.”Crude stocks are at very healthy levels and are not expected to fall, but easing petrol levels, albeit from very healthy levels too, should continue to feed into crude prices, coming as they do in the middle of refinery maintenance season.”US crude stocks, already at seven-year highs, are expected to rise another 2,7 million barrels in the week to last Friday, but petrol is seen falling 1,3 million barrels after a 4,2 million-barrel drop ended a 10-week stock build last week, a Reuters poll of analysts found.Stocks are falling as producers complete a more comprehensive maintenance programme than most years to phase out the petrol additive MTBE, banned in several states for polluting water.Oil traders fear that the loss of MTBE may tighten supplies this summer.In Nigeria, militant attacks have forced the OPEC member to shut in 556 000 barrels per day (bpd) of crude, an upward adjustment of nearly 100 000 barrels since violence flared last month, the country’s top oil official, Edmund Daukoru, said on Tuesday.And uncertainty around supply from Iran continued to weigh, as the UN Security Council met to consider a statement that would call on the Islamic state to stop all uranium enrichment activities, which some believe are linked to weapons-making.- Nampa-ReutersUS crude fell 30 cents, or 0,5 per cent, to U$62,80 a barrel after rising 2 per cent to a one-week high a day ago.London Brent dropped 25 cents to US$63,72 a barrel.US petrol futures dropped 1,55 cents to US$1,8505 a gallon, having soared 7 per cent to hit a five-month high on Tuesday.”I think we’re just seeing a bit of consolidation this morning, but the main influence continues to be expectations of a stock drawdown for petrol,” said Gerard Burg, minerals and energy economist at the National Australia Bank in Melbourne.”Crude stocks are at very healthy levels and are not expected to fall, but easing petrol levels, albeit from very healthy levels too, should continue to feed into crude prices, coming as they do in the middle of refinery maintenance season.”US crude stocks, already at seven-year highs, are expected to rise another 2,7 million barrels in the week to last Friday, but petrol is seen falling 1,3 million barrels after a 4,2 million-barrel drop ended a 10-week stock build last week, a Reuters poll of analysts found.Stocks are falling as producers complete a more comprehensive maintenance programme than most years to phase out the petrol additive MTBE, banned in several states for polluting water.Oil traders fear that the loss of MTBE may tighten supplies this summer.In Nigeria, militant attacks have forced the OPEC member to shut in 556 000 barrels per day (bpd) of crude, an upward adjustment of nearly 100 000 barrels since violence flared last month, the country’s top oil official, Edmund Daukoru, said on Tuesday.And uncertainty around supply from Iran continued to weigh, as the UN Security Council met to consider a statement that would call on the Islamic state to stop all uranium enrichment activities, which some believe are linked to weapons-making.- Nampa-Reuters