Oil Prices Rise Slightly in Asia Trading

Posted 18 October 2006 @ 06:49 am EET     Print     Reprint     E-Mail     Comments

SINGAPORE (AP) - Oil prices edged up Wednesday ahead of the release of weekly U.S. petroleum supply data expected to show a decline in distillate stocks. Light, sweet crude for November delivery rose 17 cents to $59.10 a barrel in early Asian electronic trading on the New York Mercantile Exchange.

Analysts surveyed by Dow Jones Newswires expected weekly petroleum inventories data to be released Wednesday to show a decline of 900,000 barrels in distillate stocks, which include heating oil, in the week ended Oct. 13. Gasoline stocks were seen unchanged, the survey showed.

Heating oil prices rose 0.72 cent to $1.7410 a gallon (3.8 liters) while gasoline futures gained a cent to $1.4733 a gallon. "Distillate stocks will likely show another significant decline mainly in response to ongoing refinery maintenance turnarounds and an early seasonal cold spell," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Crude oil inventories are expected to rise by 1 million barrels, the survey showed. The Nymex crude contract declined Tuesday by $1.01 to settle at $58.93 a barrel as traders awaited a clearer message from the Organization of Petroleum Exporting Countries, which meets Thursday.

OPEC said this weekend that it would hold an emergency meeting Thursday in Qatar to discuss production quotas. Some members have suggested a cut of 1 million barrels per day was possible. The impact of such a cut remains to be seen, with traders eager to see whether OPEC merely reduces its official output quota or reduces production from current levels, which are already slightly below the quota.

The decline was also prompted by a U.S. Federal Reserve report that said output at the nation's factories, mines and utilities fell by 0.6 percent in September, the worst showing since the widespread shutdowns caused by Hurricane Katrina a year ago.

Manufacturing output dropped 0.3 percent, with widespread declines in auto production and other consumer goods, reflecting the fact that factories are trimming production to work down a backlog of unsold items. Lower industrial activity often translates into weaker energy demand. In other Nymex trading, natural gas prices fell 13.1 cents to $6.311 per 1,000 cubic feet.