Oil prices dip amid high US supplies
Oil prices fell here on Thursday as rising US energy supplies offsets unrest in Egypt and forecasts of growing demand for crude.
Brent North Sea crude for delivery in March slipped 22 cents to $101.50 a barrel in early London trade.
New York's main futures contract, light sweet crude for March, dropped 62 cents to $86.09 a barrel.
"Crude oil prices have eased back from their recent highs as immediate concerns over supply disruptions have eased," Standard Chartered analysts said in a research note.
The oil market was particularly weighed down by the US government's latest weekly report on energy stockpiles, showing increases that raised questions about weakening demand in the world's biggest oil-consuming nation.
The US Department of Energy said Wednesday that crude oil inventories increased by 1.9 million barrels last week, rising for the fourth week running.
Supplies of distillates, which include diesel and heating fuel, rose by 300,000 barrels. Analysts had expected them to fall.
Gasoline inventories leaped more than expected, by 4.7 million barrels.
Oil prices were neverthless continuing to win support from unrest in Egypt.
Filip Petersson, an analyst at SEB Commodity Research, said he expected "a substantial Egyptian risk premium to remain in the market."
Traders fear that Egyptian unrest could affect crude oil supply in the Suez Canal, which carries about 2.4 million barrels of crude daily, roughly equal to Iraq or Brazil's output.
The canal is a key shipping route cutting through Egypt, providing a sea link between Europe and Asia and allowing ships safer and faster travel between the two regions without having to sail around the African continent.
Elsewhere on Thursday, the International Energy Agency said the global economic recovery would fuel ever greater demand for oil this year, with higher prices expected to add a 15 percent burden on advanced economies.
"Under current assumptions for global GDP, oil price and oil demand, the global oil burden could rise to 4.7 percent in 2011, getting close to levels that have coincided in the past with a marked economic slowdown," the IEA said in its latest monthly Oil Market Report.
"Indeed, the combination of higher prices with a fragile economic recovery, emerging inflationary pressures and instability in the Middle East is not a healthy one," it added.
The IEA, the energy policy and monitoring arm of the 34-member Organisation for Economic Cooperation and Development, estimated the global oil burden at 4.1 percent in 2010, knocking 0.8 percent of gross domestic product (GDP) in the OECD countries.
Based on oil at $90 a barrel it estimated the oil burden would rise by 15 percent to 4.7 percent this year, near the 5.0 percent level it estimates is likely to trigger recession.
© 2011 AFP