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Oil Prices Jump After US Inventories Data

London (AFP) Sep 14, 2005
World oil prices surged Wednesday after data showed that US crude oil inventories had fallen sharply last week in the wake of Hurricane Katrina.

New York's main contract, light sweet crude for delivery in October, jumped 1.24 to 64.35 dollars per barrel in early deals.

In London, the price of Brent North Sea crude for October delivery gained 99 cents to 62.60 dollars per barrel.

"The draw on crude stocks has put prices quite a bit better, it's what the market is reacting to," Investec analyst Bruce Evers said.

The US Department of Energy (DoE) said crude inventories dropped by 6.6 million barrels to 308.4 million in the week ending September 9. Analysts had been expecting a drop of 2.0 million barrels.

Gasoline (petrol) supplies meanwhile rose by 1.9 million barrels to 192 million last week, contrary to expectations for a fall. Distillate stocks fell 1.1 million barrels to 133.3 million barrels.

"Gasoline (petrol) stocks are less in focus now because of the end of the (US) driving season, but they remain an issue as stocks are at multi-year lows," Sucden analyst Sam Tilley said.

Despite signs that high prices have dampened global demand for crude, the market remains concerned about supply levels, particularly since refineries are struggling to turn crude into heating fuel in time for the northern hemisphere winter.

The DoE on Wednesday said US refineries were operating at 87.3 percent of capacity in the week to September 9, up slightly from 86.8 percent in the week just after Hurricane Katrina made landfall on the Gulf Coast.

"Prices will go sideways for the time being, until maybe the end of October we'll trade between 60 and 70 dollars. Not below 60, not with all this refining capacity out of action," Evers added.

The International Energy Agency last week said it had revised down its estimate of the growth of global demand this year by about 240,000 barrels per day to 1.35 million barrels.

Expectations of lower demand growth have seen prices fall by around 10 percent since striking record high points of 70.85 dollars in New York and 68.89 dollars in London on August 30 -- a day after Hurricane Katrina battered US oil facilities in the Gulf of Mexico, hampering supplies.

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Portugal To Build World's Largest Solar Power Station
Lisbon (AFP) Sep 13, 2005
Portugal, one of the most oil-dependent nations in Europe, will begin work on the world's biggest solar energy power station next year, officials said Tuesday.

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