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Oil Steadies Near $71; Thin US Fuel Stocks Give Support

Reuters
Monday, 2 Jul 2007 | 3:20 PM ET

U.S. crude steadied near $71 a barrel on Monday, underpinned by falling gasoline inventories in the U.S. and expectations for a recovery in refinery use.

London Brentcrude was unchanged at $71.41 a barrel by 0909 GMT. U.S. crude eased 11 cents to $70.57, after settling on Friday at the highest since August 2006.

Britain has raised its security rating to the highest level after failed car bombing attempts in London and an attack on a Scottish airport over the weekend.

The FTSEurofirst 300 index of top European shares was down 0.6%.

Charting the Markets
CNBC's Guy Johnson and Royce Tostrams, Technical Analyst at Tostrams Groep, take a closer look at the charts for NYMEX Light Sweet Crude Oil and Euro/Dollar.

The U.S. Independence Day holiday on July 4 will delay until Thursday weekly U.S. inventory data, which some analysts expect will show higher U.S. fuel production after several plants returned from maintenance.

ConocoPhillips planned to begin a restart of a gasoline-making unit in Texas on Friday, while two crude units at a BP refinery in Indiana will reach full rates within two to three weeks.

A series of outages in the world's top consumer has helped drive down gasoline stockpiles during peak summer demand, though crude stockpiles have risen to nine-year highs.

Speculators on the New York Mercantile Exchange trimmed net long positions, or bets that prices will rise, in crude oil from a two-month high in the week to June 26, the Commodity Futures Trading Commission said Friday.

Crude stockpiles in Cushing, Oklahoma -- the delivery point for U.S. crude futures -- fell by 1.4 million barrels in last week's data, prompting the U.S. benchmark to narrow its discount to Brent.

U.S. crude has been trading at an atypical discount to Brent since February, weighed down by higher inventories after a spate of refinery outages cut demand.

Attacks on Nigeria's oil industry that have cut production in Africa's top exporter and supply cuts by the Organization of the Petroleum Exporting Countries have helped Brent climb 17% this year.

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