Oil prices mixed ahead of US supply report

SINGAPORE: Oil prices were mixed in Asia yesterday ahead of the release of a key US supply report and as dealers eyed escalating violence in crude producer Libya, analysts said.

US benchmark West Texas Intermediate for April delivery gained two cents to $50.54 while Brent crude for April fell 29 cents to $60.73 in afternoon trade.

Tetsu Emori, commodity fund manager with Astmax Investments in Tokyo, said the official US stockpiles report for the week to February 27 to be released later Wednesday will show an increase in crude reserves, indicating weak demand in the world’s biggest economy.

“This will be negative for price recovery,” Emori told AFP.

Crude oil stockpiles likely rose 3.95 million barrels last week, according to a Bloomberg News survey.

Overall reserves meanwhile currently stand at 434.1 million, the most since the start of official stockpiles data compilation in 1982, Bloomberg said.

Emori said dealers are also closely monitoring unrest in crude producer Libya.

Islamist militants seized control of at least two oil fields in central Libya on Tuesday, a spokesman for the country’s oil industry security service told AFP.

Violence and a slow-down at export terminals had already forced a shutdown for the last several weeks at the Al-Bahi and Al-Mabrouk fields, about 310 miles (500 kilometres) east of Tripoli.

An attack on the sites in February killed 11 people and all staff were evacuated.

Libya has been awash with weapons since the 2011 uprising that toppled and killed dictator Moamer Kadhafi, and opposing militias have since been battling for control of its cities and oil wealth.

Fighting in the North African state, a member of the Opec oilproducing cartel, has seen output reduced from a high of almost 1.5 million barrels a day to 150,000 a day, according to analysts.

Talks to settle a strike by workers at three major US refineries operated by Royal Dutch Shell are set to restart yesterday following a stalemate on February 20.

More than 5,000 workers spread across around a dozen installations have been on strike since February 1 demanding improved wages and safety conditions. AFP