Oil prices mixed on Portugal debt woes, Middle East unrest

Oil prices dipped Thursday in London, weighed down by Portugal’s debt crisis, but rose in New York thanks to unrest in the Middle East and North Africa, analysts said.

Brent North Sea crude for delivery in May inched down one cent to $115.56 a barrel in London deals.

However New York’s main contract, light sweet crude for May, rose 78 cents to $106.51 per barrel.

“The debt crisis in Portugal is likely to weigh on oil prices only briefly… given the numerous supportive factors,” said Commerzbank analyst Carsten Fritsch.

“Besides the war in Libya and the ongoing unrest in other Arab countries, yesterday’s inventory data from the US Department of Energy have given tailwind to oil prices… gasoline stocks surprisingly fell by a sharp 5.3 million barrels, despite higher refinery utilisation.”

The market is closely following the level of US gasoline (petrol) inventories ahead of the summer driving season in the United States starting in May, when many Americans hit the roads on holiday, pushing up fuel demand.

For now, unrest in the Libya and the Middle East was “the main factor driving crude oil prices,” added Phillip Futures analyst Ong Yi Ling.

Prior to the start of the unrest, Libya was producing 1.69 million barrels of oil a day, according to the International Energy Agency.

Output in the North African country has now almost ground to a halt, the IEA said earlier this month.

Elsewhere, anti-government demonstrations continue to be held in Yemen, Bahrain and Syria and there are fears that the unrest could spread to oil-producing kingpin Saudi Arabia.

In Europe, all eyes were on Thursday’s EU summit, set to be dominated by rising expectations that indebted Portugal could soon be forced to request a multi-billion-euro bailout.