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Oil slips below $60, weighed by big US stocks - ASHARQ AL-AWSAT English Archive
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LONDON (Reuters) -Oil prices fell below $60 on Tuesday after slumping in the previous session as forecasts for another build in U.S. crude inventories countered concern that tension over Iran’s nuclear work may disrupt supply.

U.S. light sweet crude for April delivery traded 57 cents lower at $59.85 a barrel at 1212 GMT, following a drop of nearly 4 percent on Monday.

London Brent crude traded down 8 cents at $61.26, after falling almost $2 the previous day.

Expectations of a further rise in U.S. crude inventories, which are already at their highest in about seven years, may cause prices to fall, dealers said.

“It’s going to see some more downside pressure later on this afternoon,” said Kevin Blemkin of Man Financial in London. “Crude is looking at another build.”

“In the background, you’ve still got the geopolitical worries with Iran, but there’s no news on that one so I suppose the market’s going to drift a little bit,” he said.

U.S. crude supplies are expected to show another hefty rise of 2.5 million barrels when the U.S. government releases its oil data on Wednesday, analysts polled by Reuters said. That would be the sixth consecutive weekly increase.

Analysts predicted a 2.2 million-barrel drop in distillates stocks, which include heating oil, but said the decline was seasonal. Gasoline inventories are also forecast to drop an average 1.2 million barrels.

U.S. crude inventories have swelled in part because of a tide of imports in recent months that has given the world’s top consumer a thick buffer against supply disruptions.

Stockpiles of crude in the U.S. Gulf Coast, the heart of the nation’s oil industry, are at their highest level since 1990, the U.S. Energy Information Administration (EIA) said.

Even at $60, oil prices are about twice where they were two years ago as rising world demand stretches producers and refiners, eroding the world’s reserve production capacity to counter an extended supply outage.

Real and threatened supply breaks, including attacks on Nigeria’s oil industry and concern the dispute over Iran could affect exports from the world’s fourth-largest supplier mean prices will not fall below $60 for long, some analysts said.

“The market’s had a crack at $60 several times recently, but not looked at all convincing below that level,” said Kevin Norrish, analyst at Barclays Capital. “I just don’t think there’s the appetite to push it down there.”

Iranian President Mahmoud Ahmadinejad said on Monday Tehran will stand by its right to obtain nuclear technology and anyone spreading propaganda against its atomic program will come to regret it.

“No one can take away our nuclear technology. The Iranian nation has obtained it and will preserve it,” he said in a televised address to mark the start of the Iranian year.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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