Oil prices rebound as stock figures unsettle markets

LONDON (AFP) - Oil prices bounced off seven-week lows on concerns over a smaller-than-expected weekly rise in US crude oil stockpiles and a surprise fall in winter fuel inventories.
New York's main contract, light sweet crude for delivery in December, climbed by 63 cents to 48.00 dollars a barrel at about 1700 GMT, after losing 1.72 dollars on Tuesday
Brent North Sea crude for December rose by 74 cents to 44.45 dollars in London, a day after slumping by 2.21 dollars.
Prices rose after the US Department of Energy said crude oil inventories increased by 1.8 million barrels to 291.5 million in the week to November 5, about average for this point of the season, the Energy Department said.
Distillates -- mostly heating oil and diesel -- fell 100,000 barrels to 115.6 million, the eighth consecutive drop. Stocks remain below the average range, the department said.
Heating oil inventories alone eased 100,000 barrels to 48.4 million barrels while diesel stocks were flat at 65.2 million.
"Our view is that the figures are positive for prices," said Societe Generale analyst Frederic Lasserre in Paris.
"They justify a rise in prices, notably because there were strong expectations of rises across the stocks, in both crude and refined products. In fact, the rise in crude was smaller than expected and we had falls in product inventories when we were looking for rises.
"That doesn't justify a surge in prices but should probably halt temporarily the downward movement that we have seen over the past two weeks," he said.
Before Wednesday's rebound, New York light sweet crude has tumbled by about 14 percent over two weeks, and Brent by 15 percent as supplies recover from hurricane-induced losses in the Gulf of Mexico.
Oil prices are likely to soften further in the coming months amid continued strong output from OPEC and adequate stocks of industrial crude in key developed countries, the International Energy Agency said.
The Paris-based IEA said in its monthly report for November that its forecast for global oil demand was roughly unchanged at 82.4 million barrels a day in 2004 and 83.8 million barrels a day in 2005.
Demand growth is set to slow from a revised figure of 2.64 million barrels a day in 2004 to 1.44 million barrels a day next year.
"Barring any major unforeseen developments, oil markets should continue to ease heading into and out of the (northern hemisphere's) winter," the report said.

11/10/2004 - 17:52 GMT - AFP