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Petrol set to rise after shrinking US stockpile
Source: AP|Published: Saturday August 5, 7:21 AM
Crude oil prices barged back into expensive $US30-a-barrel territory again today on the New York Mercantile Exchange, rising nearly five per cent on renewed concerns about shrinking US stockpiles.
OPEC and oil top producer Saudi Arabia both pledged recently to pump more oil if prices didn't fall substantially, prompting a sell-off on the market.
But extra oil hasn't yet shown up in any big quantities, and analysts said this week's reports by the Department of Energy and the American Petroleum Institute, showing dwindling supplies, were finally sinking in.
"Despite their promises, the Saudis haven't made any significant moves to increase production," said Phil Flynn, energy analyst for Alaron Trading Corp in Chicago.
The reports showed that US crude supplies had dropped by nine million to ten million barrels last week at a time when analysts were expecting an increase. It was the biggest decline in six months.
Also contributing to the increase were bullish comments by Venezuelan President Hugo Chavez. Chavez said the rise in the price of oil was the result of a strategy, and that strategy would continue.
West Texas Intermediate crude for September delivery rose $US1.30 to $US29.96 a barrel.
Natural gas jumped for separate reasons - word that the first tropical storm of the Atlantic storm season, Alberto, had formed and was moving west from the coast of Africa.
Any weather system with even the potential to wreak damage on offshore production rigs in the Gulf of Mexico spooks investors, who worry about production disruptions in a region that supplies about one-fourth of the United States' natural gas.
In London, September Brent crude from the North Sea rose $US1.06 to $US29.37 a barrel on the International Petroleum Exchange.
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