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Oil rises above $106 on US crude data.

Byline: Perth

(Image: oil.gif )

Oil rose for a third straight session on Thursday to top $106 a barrel, bolstered by a weak dollar and US government data showing a larger-than-expected drop in fuel stocks.

US light crude for May delivery rose 22 cents to $106.12 a barrel by 0152 GMT. It had settled up $4.68, or 4.6 percent, at $105.90 a barrel, posting the biggest one-day percentage gain in three weeks.

London Brent crude rose 36 cents to $104.35.

'The oil price is obviously still getting support from the bullish set of US inventory data. The dollar also took a tumble last night so that is also a supportive factor,' said David Moore, a commodities analyst at the Commonwealth Bank of Australia in Sydney.

US government data on Wednesday showed crude oil inventories were unchanged last week, bucking expectations for an increase of 1.7 million barrels.

Gasoline inventories fell by 3.3 million barrels, more than triple the 800,000-barrel forecast, as US refiners slowed production to the lowest levels since October 2005, when several refineries were knocked offline by hurricanes Katrina and Rita.

Distillates dropped 2.2 million barrels, also more than forecast.

Analysts said a weak dollar also spurred renewed investment in the commodities and energy markets, giving oil prices a boost.

The dollar steadied on Thursday, after falling sharply for two straight sessions due to poor US durable goods orders data and comments by European Central bank chief Jean-Claude Trichet that euro zone rates were at the right level.

Support also came from news of supply disruptions in France and Gabon due to a workers' strike.

French port and dock workers held a 24-hour strike at French state-owned ports on Wednesday, blocking France's largest oil and gas port, while a workers' strike in Gabon had halted 60,000 barrels of daily output from a Shell subsidiary in the West African nation.

Worries of a supply disruption in Iraq, which has only recently seen its oil exports return to pre-invasion levels, have also added to bullish sentiments, analysts said.

Oil production and exports from the southern oilfields could be disrupted in three days if workers cannot reach their offices due to fighting in Basra, a Southern Oil Company official said. - Reuters

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Publication:TradeArabia (Manama, Bahrain)
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Date:Mar 27, 2008
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