LONDON (Reuters) – Oil prices fell on Monday after reaching an 11-month high late last week, as light post-weekend profit-taking was limited by concerns over U.S. fuel supplies, Nigerian crude shipments and North Sea maintenance.
London Brent crude currently seen as a better indicator of the global market, eased 36 cents to $75.26 a barrel after briefly surging above $76 the previous session. The all-time record high for Brent is $78.65, reached in early August 2006.
U.S. crude fell 49 cents to $72.32 a barrel.
“With OPEC continuing to withhold oil from the market the general picture remains one of tightness, with kidnappings in Nigeria, the upcoming hurricane season and ongoing geopolitical concerns all adding to uncertainty over the summer,” said David Dugdale, an analyst at MFC Global Investment Management.
The International Energy Agency, adviser to 26 industrialized countries, said world oil demand would rise faster than expected to 2012 while supply lags.
“Despite four years of high oil prices, this report sees increasing market tightness beyond 2010,” the IEA said in its medium-term oil market report.
But OPEC ministers disagree, saying refinery bottlenecks and geopolitical tensions are to blame for high oil prices this year, not supply shortages.
Algeria’s Energy and Mines Minister Chakib Khelil told Reuters there was “not much” OPEC could do to bring down prices as global crude oil stocks were already sufficient.
“There is plenty of stocks. It’s a problem with capacity and refining,” Khelil said ahead of a gas pipeline conference in Brussels.
“Even if it (OPEC) increases production, it’s just going to increase stocks and not have any effect because prices are drawn by petroleum product prices.”
Tensions in Nigeria have eased slightly after kidnappers released a 3-year-old British girl after four days in captivity. But analysts saw little immediate hope for ending 18 months of violence in the world’s eighth largest exporter.
Kidnappings in Nigeria have intensified in the past one and a half years, while attacks on the oil industry have shut in 661,000 barrels per day (bpd) of Nigerian production.
Expectations that summer maintenance will reduce supplies of crude from North Sea oilfields have also helped boost prices, widening Brent crude’s premium to the U.S. grade and putting second-month September Brent at a premium to other contracts.