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Oil rises above $93; Venezuela cuts off Exxon
Reuters
First Posted 03:09:00 02/14/2008
NEW YORK -- Oil prices rose above $93 a barrel on Wednesday after Venezuela said it would stop selling crude to Exxon Mobil Corp. because of an intensifying legal dispute over a nationalized oil project.
Oil also received a boost from a US government report showing a smaller-than-expected increase in crude stockpiles last week due to a slowdown in imports and an increase in domestic demand from refiners, traders said.
US crude futures rose 75 cents to $93.53 a barrel as of 1730 GMT, while London Brent crude rose 71 cents to $93.57 a barrel.
"The ongoing legal fight between Venezuela and Exxon Mobil has brought the market's attention back to the fragility of the supply side of the oil market," said Kevin Norrish, energy analyst at Barclays Capital.
President Hugo Chavez cut oil sales to Exxon Mobil late on Tuesday after the company won a court decision freezing $12 billion of Venezuela's overseas assets in a fight for compensation for a nationalized oil project.
Top global oil producers have assured the United States they can make up for any major supply disruption should Venezuela cut exports, a US government official told Reuters on Tuesday.
Several energy experts have said the move by Venezuela, while alarming, is unlikely to pose a serious threat to US supply or to Exxon Mobil's operations.
"This has very little impact on actual production. Crude stocks are high. Exxon can get their crude from almost anyone. What is Venezuela going to do?" said Kyle Cooper, Energy Futures Research, IAF Advisors in Houston, Texas.
Crude inventories in the world's top consumer rose 1.1 million barrels last week, the US Energy Information Administration said, less than the 2.7 million barrels expected by analysts. It was the fifth consecutive weekly increase.
"There are no major surprises, but the crude supply figure looks supportive to me," said Jim Ritterbusch, president of Ritterbusch and Associates.
After surging to a record $100.09 on Jan. 3, oil has traded in a narrow range near $90 a barrel as fears of a US recession weighed on prices.
The International Energy Agency cut its world oil demand growth forecast this year due to the economic slowdown in the world's top energy consumer.
The IEA, adviser to 27 industrial countries, forecast in its monthly Oil Market report that global oil demand growth would average 1.67 million barrels per day, down by 310,000 bpd from its previous estimate.
Copyright 2008 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Oil firms still unsure where to go from Pandacan depotAyala Land to issue 1B shares to acquire propertiesOil steady on Venezuela cuts but US stocks healthy
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