Oil prices mixed after surprise US energy data

19th October 2011, Comments 0 comments

Crude prices traded mixed on Wednesday after news of a surprise drop in official energy stockpiles in the United States, the world's biggest oil consumer.

New York's main contract, light sweet crude for delivery in November, rose 22 cents to $88.56 following release of the data.

Brent North Sea crude for December dropped 44 cents to $110.71 in late London deals.

"The large decline in crude oil stocks was totally unexpected and provided some support to the market," said Sucden brokers analyst Myrto Sokou.

"It seems that there is underlying oil demand from the US, easing concerns about a slowdown in the global economic growth. Crude oil prices spiked on the news and then consolidated within the recent range," she told AFP.

The US Department of Energy said that crude stockpiles fell by 4.7 million barrels in the week to October 14. Analysts polled by Dow Jones Newswires had forecast a rise of 1.1 million barrels.

Oil prices were mixed a day after jumping on a report that France and Germany had agreed to boost the EU rescue fund to 2.0 trillion euros ($2.74 trillion), as markets awaited a weekend summit on the eurozone crisis.

Traders had Tuesday ignored data showing that economic growth in China -- the world's biggest energy consumer -- slowed to 9.1 percent in the third quarter.

The International Energy Agency on Wednesday predicted that the Organisation of Petroleum Exporting Countries would need to maintain or increase its oil output to meet global demand next year, despite weakening world growth.

"There is an ample market for OPEC production at or above current levels" of 30.1 million barrels per day, said David Fyfe, director of the IEA's market and oil divisions.

"We don't think there is a market (in which) producers should be looking to scale back supply," Fyfe told a press conference during the final day of a ministerial meeting in Paris.

The IEA, which represents wealthy oil consuming countries, calls regularly on OPEC to keep oil flowing and avoid putting the brakes on growth.

On Tuesday, the IEA said the energy sector needed $38 trillion (27 trillion euros) in investment by 2035 as it becomes increasingly difficult -- and costly -- to extract fuel.

The figure, equal to $1.5 trillion a year, is about 15 percent higher than the IEA's previous forecast, chief economist Fatih Birol said at the start of the gathering of energy ministers and industry bosses in the French capital.

The IEA is the energy arm of the Organisation for Economic Co-operation and Development (OECD) and works to ensure the stable supply of energy to its 28 member countries.


© 2011 AFP

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