Oil prices mixed after US inventory data

27th February 2013, Comments 0 comments

World oil prices were mixed on Wednesday after the United States reported a smaller-than-expected rise in its crude stockpiles and as markets tracked uncertainty over Italy's political future.

Brent North Sea crude for delivery in April dipped four cents to $112.67 a barrel in late London deals.

New York's main contract, light sweet crude for April climbed 40 cents to $93.03 a barrel.

The US Department of Energy on Wednesday said that American crude inventories rose by 1.1 million barrels last week, less than half the amount predicted by analysts.

"This was lower than the 2.4 million expected, suggesting stronger demand" for crude in the world's biggest oil consumer, said Fawad Razaqzada, an analyst at GFT Markets trading group.

Crude futures had fallen on Tuesday, with Brent closing down $1.73 a barrel, amid uncertainty stemming from Italy's inconclusive elections and expectations of fresh increases in bulging US crude inventories, dealers said.

"It would appear that financial investors are currently withdrawing from the market amid concerns that reforms could be halted in the wake of the Italian elections and that the euro crisis could flare up again," Commerzbank analyst Carsten Fritsch said on Wednesday.

Investors were wary after Italy's inconclusive elections gave a key role to an anti-austerity party that has ruled out joining a coalition government, setting the stage for a drawn-out stalemate.

"The outcome of the elections was even more confusing than we had anticipated," the Mediobanca investment bank said as Moody's warned it might downgrade Italy's debt rating, saying the vote result "increases the risk of political paralysis and prolongs political uncertainty."

The rating agency added: "This weeks elections have implications well beyond Italy itself and are, indirectly, credit-negative for other pressured euro area sovereigns."


© 2013 AFP

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