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Thursday May 26, 07:13
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Oil shoots up on weak US inventory report
(by Julia Jenson)
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Oil jumped above $51 a barrel Wednesday regaining losses after the U.S. government report showed a decline in the nation’s stockpiles.
Oil for July delivery traded at $51.12 on the Nymex.
The Energy Information Administration reported that crude oil inventories lost1.6 million barrels in the past week at the time when most analysts predicted a rise. The report mentioned that it is the second drop in the past 15 weeks. The decline could trigger a rally in oil prices despite high inventory levels.
In the meantime, gasoline stocks added 600,000 barrels reaching 215.4 million barrels.
"The bottom line is that the overall stocks are huge. But the tightening in stockpiles is finally beginning," Jan Stuart, an analyst at Fimat USA, told Reuters.
Yesterday a new pipeline was opened that will take Caspian oil to Turkey bypassing the once regional monopolist in exports of the region’s oil resources Russia. The 1,100-mile US-backed pipeline that will connect the Azeri capital with the Turkish Mediterranean port of Ceyhan was inaugurated in the presence of Azeri, Georgian, Turkish and Kazakh leaders. The pipeline is expected to transport 1 million barrels of oil a day by the fourth quarter.
"This is the Silk Road of the 21st century," said Ahmet Necdet Sezer, Turkey’s president, at the opening ceremony.
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