Oil prices stable after US stocks report

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World oil prices steadied on Wednesday following the latest update on energy reserves in key consumer the United States despite intensified fighting in crude exporter Libya.

In London afternoon trade, Brent North Sea crude for delivery in May rose 26 cents to $115.42 a barrel, after falling slightly earlier in the day.

New York's main contract, light sweet crude for May, dipped four cents to $104.75.

The US government's Department of Energy (DoE) said that American crude stocks rose by 2.9 million barrels last week, while gasoline (petrol) inventories dropped by 2.7 million barrels.

"Due to Japan and Libya, the DoE report has been ignored as a trading input over the last few weeks as market participants were focusing on the macro-developments," said analyst Olivier Jakob at consultancy PetroMatrix.

"Now that those events are not anymore attracting any trading volume we would expect that traders will start watching the DOE report again."

Traders are also keenly following the level of gasoline reserves ahead of the summer driving season in the United States starting in May, when many Americans hit the roads on holiday, pushing up demand.

The United States is also the world's biggest consumer of oil.

In Libya on Wednesday, loyalist forces overran the oil town of Ras Lanuf, scattering outgunned rebels as world powers debated arming the rag-tag band of fighters seeking to oust Moamer Kadhafi.

AFP reporters quoting rebel fighters said Kadhafi's troops swept through Ras Lanuf, strategic for its oil refinery, blazing away with tanks and heavy artillery fire soon after dawn.

Panicked rebels fled in their hundreds through Uqayla, 20 kilometres (12 miles) east of Ras Lanuf, calling for coalition air strikes on Kadhafi's forces.

Libya produced 1.69 million barrels a day before the unrest, according to the International Energy Agency. However, output has since fallen sharply.

On Tuesday, the oil market had risen, ending three days of losses, as traders reacted to news that Kadhafi loyalists were winning back ground.

"Oil prices rose yesterday as forces loyal to Kadhafi moved eastwards to reoccupy coastal towns in the strategically important oil-exporting region," added Westhouse analyst Trish Hart.

Across in Japan, meanwhile, crews continued their struggle to avoid a meltdown at the crippled Fukushima Daiichi plant that was rocked by a devastating earthquake and tsunami on March 11.

© 2011 AFP

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