Oil remains steady, U.S. stockpiles seen rising (Reuters)

Mon May 14, 2007 11:17PM EDT
By Osamu Tsukimori

TOKYO (Reuters) - Oil prices steadied on Tuesday, as fears about supply disruptions were countered by forecasts that U.S. inventory data will show higher stockpiles ahead of peak summer demand.

London Brent crude for June, which expires on Wednesday, was 12 cents up at $66.95 a barrel by 0239 GMT. It ended unchanged on Monday after gaining a total of more than $1.50 on Thursday and Friday. U.S. crude for June gained 16 cents at $62.62 a barrel.

With U.S. refiners beginning to bring plants back from maintenance, analysts polled by Reuters forecast U.S. inventory data due on Wednesday will show gasoline inventories rose by one million barrels last week.

Crude inventories are expected to rise by 200,000 barrels, while distillate fuel stocks are seen up 1.3 million barrels.

"We are at a stage where they've got to build up the inventories for the peaking demand that's coming in the middle of June," said Tobin Gorey, a commodity analyst with the Commonwealth Bank of Australia in Sydney.

U.S. average gasoline pump prices are now at a record $3.10 a gallon, coming as U.S. President George W. Bush ordered government agencies on Monday to begin developing regulations to carry out his plan to reduce gasoline consumption.

Bush's plan will not affect this summer's U.S. gasoline prices or supplies, but by 2017 it is supposed to have Americans using 20 percent less gasoline and billions of gallons more in renewable and alternative fuels instead.

Oil also steadied as concerns about disruptions to West African supplies eased, after production from the 60,000 barrels per day (bpd) Nkossa oil field in the Congo Republic was expected to be restored within three weeks after a fire halted output.

U.S. oil company Chevron Corp. (CVX.N: Quote, Profile, Research said on Monday it expected full production to resume at its 42,000 bpd Abiteye oil field in Nigeria in the next few days.

Algeria's oil minister Chakib Khelil said on Monday that global oil supply is "good" despite outages in Nigeria, the world's eighth largest exporter, where violence has shut off more than 750,000 bpd or a fifth of the country's supply.

Worries over OPEC producer Iran's dispute with the West over its nuclear program remained a supportive factor, after Iranian President Mahmoud Ahmadinejad on Monday threatened "severe" retaliation if the United States attacked his country.

U.S. oil company Chevron Corp. (CVX.N: Quote, Profile, Research said on Monday it expected full production to resume at its 42,000 bpd Abiteye oil field in Nigeria in the next few days.

Algeria's oil minister Chakib Khelil said on Monday that global oil supply is "good" despite outages in Nigeria, the world's eighth largest exporter, where violence has shut off more than 750,000 bpd or a fifth of the country's supply.

Worries over OPEC producer Iran's dispute with the West over its nuclear program remained a supportive factor, after Iranian President Mahmoud Ahmadinejad on Monday threatened "severe" retaliation if the United States attacked his country.