Oil above $66 as funds buy, fuel stocks may draw
SINGAPORE, Apr 4 (Reuters) Oil eased on limited profit-taking on Tuesday, holding near a two-month high as investors shift more funds into the commodities complex and fuel inventories in the United States look set to fall again.
U.S. light sweet crude for May delivery dipped 25 cents or 0.37 percent to .49 a barrel, fading further from Monday's .90 peak, the highest in two months. London Brent crude edged down 4 cents to .80 a barrel.
Commodities have rallied over the past week as investors allot more funds to the sector at the start of the second quarter, pushing copper and zinc to new highs and giving a fresh lift to oil prices weighed down by bulky crude oil inventories.
Iran's dispute with the West over its nuclear research and the prolonged loss of a quarter of Nigeria's production has added to the investment push, helping bring prices closer to last year's record peak of .85 a barrel.
''The oil market has been wrestling with a slightly easier fundamental picture in the near-term and a longer-term concern about event risk,'' said Michael Coleman, managing director of Singapore-based hedge fund Aisling Analytics.
The fundamental picture may improve on Wednesday, when analysts expect U.S. government data to show a modest 900,000-barrel rise in crude stocks, but distillates are expected to fall by 1.5 million barrels and gasoline by 1.8 million barrels. S] While crude supplies recently touched a seven-year high, dealers are anxious that the cut to Nigerian exports and growing demand heading into the summer driving season may whittle down supplies in the next few months.
''What appears to be currently an ample stock situation will start looking a lot tighter quite quickly, and what doesn't go away is all the event risk,'' said Coleman. ''It's a much more dangerous-looking world than a year ago.'' Nigerian Minister of State for Petroleum Edmund Daukoru said on Monday that Royal Dutch Shell would restart its offshore 115,000 barrel-per-day (bpd) EA field in days, but that would still leave more than 400,000 bpd of production off line.
Oil industry and military officials said that additional naval patrols in the Niger Delta had not convinced Shell to restart its onshore Forcados production after a wave of militant attacks in the world's eighth-largest exporter.
The Organization of the Petroleum Exporting Countries (OPEC) will meet informally during talks between oil consumers and producers in Qatar starting April 22, but ministers say the cartel has little choice but to keep pumping at near full throttle with prices nearing the mark.
REUTERS SP BD1012