Oil prices stable before US energy report

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World oil prices steadied on Wednesday as traders awaited a crucial weekly snapshot of crude stockpiles in top energy consumer the United States.

New York's main contract, light sweet crude for delivery in August, was unchanged at 77.15 dollars a barrel.

London Brent North Sea crude for August firmed three cents to 76.68 dollars in morning trade.

Later on Wednesday, the US government's Department of Energy (DoE) will release its report on American crude inventories for the week ending July 9.

Crude reserves are forecast to drop by 1.2 million barrels, according to analysts polled by Dow Jones Newswires. Gasoline or petrol stockpiles are expected to be flat.

Prices had drifted lower in earlier Asian trading on Wednesday as some traders took profits after big gains the previous day.

"The pullback is not really very significant," said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.

"I would attribute this (earlier) fall to some profit-taking, while the equities markets continue to provide strong support for oil," he added.

Asian stock markets surged on Wednesday, pulling Europe higher, as investors applauded record results from US hi-tech giant Intel, which is the world's biggest chipmaker.

Oil had soared in value on Tuesday, as the dollar weakened and the International Energy Agency (IEA) forecast that demand for the commodity was projected to increase slightly this year.

"In its latest monthly report, the IEA increased its outlook for 2010 oil demand growth slightly to 1.77 million barrels per day," said analysts at the JBC Energy consultancy in Vienna.

"Given the ongoing discussions of a double-dip recession and the absence of a clear sign of the sustainable recovery of the global economy, the figure seems fairly optimistic.

"Furthermore, the IEA sees demand growth in 2011 slowing down to 1.3 million barrels per day, indicating that the vast majority of the economic uptick will take place in 2010."


© 2010 AFP

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