TOKYO, Feb 22 Oil prices held at $ 60 on Thursday as traders worried about supply hitches

By Staff
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TOKYO, Feb 22 (Reuters) Oil prices held at $60 on Thursday as traders worried about supply hitches at US oil refineries and pipelines, ahead of inventory data expected to show that winter demand pushed down U.S. heating fuel stocks.

U.S. crude for April delivery was down 2 cents at $60.05 a barrel by 0340 GMT, after gaining $1.22 on Wednesday. London Brent crude for April was down 3 cents at $59.32.

A key fuel pipeline supplying the U.S. Northeast with gasoline and diesel has shut down due to a spill, following on from North American refinery fires and raising supply concerns ahead of peak summer driving demand.

U.S. distillate supplies were expected to be down 2.9 million barrels as a freeze last week kept heating oil furnaces burning, while gasoline stocks were seen rising just 100,000 barrels in data due later on Thursday, a poll of analysts found.

''The focus now is turning away from distillates and towards gasoline,'' said Tony Nunan, manager at Mitsubishi Corp.'s risk management unit in Tokyo. ''So that was one of the reasons why the market jumped yesterday, the refinery problem and the pipeline problem in the United States.'' The pipeline's operator TEPPCO said on Wednesday it could restart the downed portion of its 240,000 barrels per day (bpd) oil iproducts line by Saturday, if repairs go as planned.

A fire over the weekend at leading U.S. refiner Valero Energy Corp.'s 170,000 bpd Texas refinery was expected to keep the plant shut for several weeks, one of a slew of refinery problems in North America.

Crude supplies will also be trimmed after BP said it shut its 47,000 bpd Northstar oil field in the Beaufort Sea off Alaska for unplanned repairs that could keep it out of service until next week.

Also providing a bullish impetus for prices -- which have climbed from a slump below $50 in mid-January -- has been increased tension between OPEC exporter Iran and the West over its nuclear programme.

Iran will continue with its nuclear programme, President Mahmoud Ahmadinejad said on Wednesday, the day of a U.N.

deadline for Tehran to freeze its uranium enrichment activities.

Tensions are also rising in fellow OPEC member Nigeria, ahead of April elections. Militant attacks have already shut a fifth of output.

OPEC next meets in Vienna on March 15 when it will probably leave its supply levels unchanged, Nigeria's energy minister said on Wednesday.

Reuters SY DB1014

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