Crude higher as Norway oil workers stay on strike

June 28, 2012 | 09:21

(0) user say

World oil prices rose on Wednesday even as the US stockpiles report remained largely unchanged from a week earlier.

World oil prices rose even as the US stockpiles report remained largely unchanged from a week earlier. (AFP Photo/Yasuyoshi Chiba)

New York's main contract, West Texas Intermediate for August delivery, jumped 85 cents to $80.21 a barrel.

In London, Brent North Sea crude for August was up 48 cents at $93.50 a barrel.

The continuing labor strike by oil workers in Norway, the world's eighth-biggest exporter, supported higher prices especially in London.

More than 700 oil workers began the strike on Sunday after pension negotiations broke down.

The strike has forced a cut in output and pushed Brent prices higher over the past two days.

Nic Brown of Natixis said that another reason for stronger buying was that US stockpiles of crude and products were peaking and a drawdown was likely over the coming weeks, alleviating the downward pressure on prices.

The US Department of Energy said that US crude stockpiles fell by just 100,000 barrels last week to 387.2 million barrels, after steadily mounting for weeks.

Brown said that building trend was likely over.

"As expected, elevated refinery utilization rates have started to counteract high oil imports and production in the US. US oil stocks are therefore expected to have reached their season peak," he said.

"As a result, we would expect to see crude stocks begin their seasonal decline over coming weeks."

Matt Smith of Summit Energy said the market was also helped by a rebound in US manufactured durable goods orders in May, a modest sign of some strength in US industry.

Meanwhile the market continues to operate in the shadow of the eurozone crisis, with eyes on how EU leaders will act when they open a crucial summit on the fragile euro area economy late Thursday.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional