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Oil Heads for $71 after Oman Cyclone Disruptions - ASHARQ AL-AWSAT English Archive
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LONDON (Reuters) – Oil rose towards $71 a barrel on Wednesday, its highest level in two weeks, after a cyclone shut Oman’s oil and gas exports before weakening on its way to Iran.

London Brent crude edged up 15 cents to $70.60 a barrel by 0915 GMT. U.S. light crude gained 7 cents to $65.68 a barrel.

Cyclone Gonu, the strongest storm to reach Oman in 30 years, disrupted the country’s crude exports of 650,000 barrels per day (bpd) for a second straight day.

It weakened on Wednesday to the equivalent of a Category One hurricane from a maximum-force Category Five, on its way to the Strait of Hormuz, a major shipping route for Gulf oil shipments, towards southeastern Iran.

“The major impact is some delays in loading. Any damage to production facilities does not seem to be on the cards,” said Andrew Harrington, a commodity analyst at ANZ Bank.

U.S. gasoline inventory data due for release later on Wednesday is expected to show stocks rising for the fifth consecutive week, as refineries gradually return from regular maintenance and glitches, a Reuters survey showed.

The peak driving season in the United States kicked off last weekend, and traders will be keen to see if gasoline inventories had built up prior to that.

“If stocks do not meet expectations, some of which have been built into the current price, then we may see prices go up,” said Harrington.

Disruptions to Nigerian oil production and Iran’s nuclear dispute with the West remain underlying issues affecting oil prices, said Gerard Burg of National Bank Australia.

Some 722,000 bpd of Nigerian production, or about 26 percent of the country’s capacity, remained shut in due to militant attacks and sabotage.