Oil prices fell on Wednesday as the market focused on the prospect of further rises in US oil and petroleum products inventories rather than the recent disruption to oil exports from Nigeria.
The latest weekly report, released on Thursday, is expected to show another increase in crude oil inventories, which are at their highest levels since last summer, and a further rise in petrol stockpiles, already at five-year highs.
Fimat, the French-owned broking group, forecasts US crude inventories to rise by 1.2m barrels and petrol by 2.4m. Another large increase would underline the view that the market is well supplied, a point several members of the Organisation of the Petroleum Exporting Countries have expressed ahead of the cartel’s meeting of oil ministers on March 8 in Vienna.
However, traders said the 25 per cent cut in Nigerian oil exports had effectively led to a cut in Opec supplies. It is expected to affect US oil imports next month, as the world’s largest oil consumer is one of the biggest buyers of Nigerian oil crude.
Supply disruption in Ecuador, South America’s fifth-largest oil producer, also added to unease in the oil market. Ecuador produced 530,000 barrels a day before the stoppages.
The country stopped pumping oil through its main private oil pipeline, which has a capacity of 450,000 b/d, because of local protests. This was a day after a brief outage to exports from Petroecuador, the state-owned oil company.
IPE Brent for April delivery fell 96 cents to $60.64 a barrel in late afternoon London trade, unwinding the 6 cents gain from the previous session. April West Texas Intermediate fell $1.19 to $61.55 a barrel in early afternoon trade on the New York Mercantile Exchange, reversing most of the $1.45 gain from the previous session.
Gold prices were $3 lower at $551.40/$552.30 a troy ounce in late afternoon London trade.
Copper prices staged a late recovery on the London Metal Exchange, having spent most of the session trading below the previous close. The three-month copper price added $39 to $4,962.5 a tonne, its fifth consecutive rise. The three-month aluminium price added $3 to $2,427 a tonne.
Refined sugar prices in London rose to their highest level in more than 15 years on talk of strong Russian buying. The May Liffe sugar contract rose $14.1 to $456.5 a tonne in London, down from its intra-day peak of $460, a near 70 per cent increase in the past three months.
Russian domestic sugar prices have risen by about $300 to $800 a tonne in the past month. Traders said the rise reflected panic buying in Russia. Raw sugar futures were 0.57 cents higher at 18.25 cents a pound on the New York Board of Trade.
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