A Review of the Nigerian Energy Industry

Oil stockpiles drop, Brent slips, US crude higher

02 November 2012, Sweetcrude, LONDON – THE international oil market saw UK Brent crude oil prices fall, Thursday, while US gasoline edged higher as crude stockpiles dropped.

The development followed on the heels of the returning North Sea supply, euro-zone concerns and support from supply disruptions after super storm Sandy countered any pressure from data showing rising inventories.

US crude futures pushed nearly 1% higher on supportive economic data and a drop in crude oil inventories, Reuters reported.

After Hurricane Sandy battered the region, logistical problems from power outages and navigational hazards continued to threaten fuel and crude oil deliveries in the New York area, including the New York Harbor delivery point for New York Mercantile Exchange fuel futures contracts, the news wire said.

Brent December crude fell $0.53 to settle at $108.17 a barrel, just above the 100-day moving average of $108.14, after slipping as low as $107.75.

The expected restart of the North Sea Buzzard oilfield on Thursday, after delays in bringing back production that has been shut by maintenance since 4 September weighed on Brent futures.

Worries about debt-laden Greece and the euro-zone economies pushed the euro lower against the US dollar, adding to pressure.

US December crude rose $0.85 to settle at $87.09 a barrel, having swung from $85.92 to $87.42.

US crude inventories fell 2.05 million barrels, instead of the expected build of 1.5 million barrels, the US Energy Information Administration said in its weekly report on Thursday, delayed a day because of Sandy.

“We saw that draw on crude and that helped put a bid in the market. I think the market found some support earlier from the employment number that had come out and the consumer confidence numbers,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

US companies added jobs in October at the fastest pace in eight months, supportive data for fuel demand and a sign of modest improvement in the labor market just days before next Tuesday’s presidential election.

Other data on Thursday showed a sharp improvement in consumer confidence and a drop in new claims for jobless benefits, while there were mixed signals regarding the health of US manufacturing.

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