Oil prices rose sharply in the second week of March, as a bearish monthly report from the International Energy Agency and a US stock build were outweighed by the continuing geopolitical tension surrounding Iran and Nigeria. Spot Brent was trading at $62.91 a barrel on 15 March, compared with $57.25 a barrel a week earlier.
The debate among the international community about what action to take over Iran's nuclear programme is providing ongoing support to prices, in spite of the lack of any actual impact on output. In Nigeria, about a fifth of production remains shut in because of unrest in the Niger Delta. Several foreign oil workers are still being held hostage by rebels fighting for wider distribution of oil revenues and compensation from the Royal Dutch/Shell Group for pollution. The latest monthly report from the IEA, published on 14 March, revises sharply downwards its demand growth forecast for 2005, by 16 per cent to 1.5 million barrels a day (b/d). US crude stocks registered a strong build for the second week running, in data released on 15 March for the week to 10 March. Crude inventories rose by 1.4 per cent to 339.9 million barrels, 10.4 per cent higher than a year earlier. However, gasoline stocks fell by 0.4 per cent to 223.9 million barrels.