Stocks fall keeps prices up

10 May 2002

Regional

Falling US crude stocks kept the oil price high in early May, despite Baghdad's announcement that it was recommencing oil exports after a one-month moratorium. Benchmark Brent crude on 7 May was valued at $27.14, an increase of more than $1 a barrel over the previous week.

The American Petroleum Institute on 7 May reported a fall in US crude stocks of 4.5 million barrels in the week ending 3 May, bringing the year-on-year growth in stocks to just 600,000 barrels. The fall reflects growth in US demand as well as tightening supply. The month-long Iraqi oil export moratorium, carried out to show solidarity with the Palestinian intifada, is only starting to make an impact now, as a result of the time lag between oil shipment and arrival. Iraqi exports began again on 9 May, but will take several weeks to reach the market.

Other OPEC members appear not to have filled the gap left by the missing 1.34 million barrels a day (b/d) of Iraqi oil with their own production, estimated to have fallen by about 80,000 b/d in April.

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