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Bloomberg: Oil Trades Little Changed After Falling on Stockpiles, Rates

EXTRACT: Royal Dutch Shell Plc can’t forecast when expatriate staff will return to Nigeria’s delta region to restore output cut by militant attacks, Chief Executive Officer Jeroen van der Veer said in a June 9 interview. The company is maintaining conservative guidance on its output and assumes “no major production is coming back” this year, Van der Veer said.  

By Trisha Huang and Gavin Evans

June 11 (Bloomberg) — Crude oil was little changed in New York after falling last week on increasing U.S. stockpiles and speculation rising interest rates may slow commodity demand.

Oil declined the most in two months on June 8, and gold and copper tumbled, after a U.S. government report showed first-quarter labor costs gained more than forecast, increasing the risk the Federal Reserve will raise interest rates. Gasoline futures fell 5.2 percent last week as below-average U.S. fuel stockpiles climbed for a fifth week.

“The gain in gasoline stocks has alleviated the upward pressure on oil prices,” said Anthony Nunan, assistant general manager for Mitsubishi Corp.’s petroleum risk management office in Tokyo. “As gasoline inventories continue to climb, crude may extend decline in the coming days.”

Crude oil for July delivery was at $64.77 a barrel, up 1 cent, in after-hours electronic trading on the New York Mercantile Exchange at 3:06 p.m. in Singapore.

The contract plunged $2.17, or 3.2 percent, to $64.76 on June 8, the lowest close since May 31 and the biggest one-day decline since April 9.

U.S. fuel consumption remains strong and oil appears “over-sold,” said Makoto Takeda, an energy analyst at Bansei Securities Co. in Tokyo. Demand, “despite higher ongoing retail prices, is very robust,” Takeda said.

Summer Demand

Gasoline demand in the U.S., the world’s largest oil user, peaks June through August as summer vacation travel puts more cars on the road. Demand averaged almost 9.5 million barrels a day in the four weeks ended June 1, or 1.5 percent more than a year earlier, the U.S. Energy Department said last week.

“The market in the U.S. is more products driven,” Mitsubishi’s Nunan said. “We’re also entering the hurricane season when several geopolitical issues remain unresolved.”

Gasoline for July delivery rose 38 cents, or 0.2 percent, to $2.1309 a gallon today, after falling 3 percent to $2.1271 on June 8, the lowest close since April 19.

Prices fell 9.2 percent the past month as stockpiles of the motor-fuel rose. August gasoline was at $2.1075 a gallon after falling 2.7 percent on June 8.

U.S. oil inventories have risen in six of the department’s seven past reports and held 342.3 million barrels on June 1, or 7.4 percent more than the five-year average for the period.

Nigeria, Iran

Brent oil futures are more influenced by recent risks to supplies from Nigeria, Africa’s biggest oil producer, and Iran, the second-largest producer in the Organization of Petroleum Exporting Countries.

Brent crude for July settlement was at $68.40 a barrel, down 20 cents, at 3:06 p.m. Singapore time after falling 3.7 percent to $68.60 on June 8, the first decline in seven days.

Royal Dutch Shell Plc can’t forecast when expatriate staff will return to Nigeria’s delta region to restore output cut by militant attacks, Chief Executive Officer Jeroen van der Veer said in a June 9 interview.

The company is maintaining conservative guidance on its output and assumes “no major production is coming back” this year, Van der Veer said.

The Group of Eight major industrial nations said June 8 they will support further measures being taken against Iran for refusing to comply with United Nations demand to stop nuclear research.

The G8 statement didn’t take account of Iran’s “commitment and its close cooperation with international organizations in charge of the nuclear issue,” Foreign Ministry spokesman Mohammad Ali Hosseini said on state television yesterday.

To contact the reporters on this story: Trisha Huang in Singapore at [email protected] ; Gavin Evans in Wellington at [email protected]

Last Updated: June 11, 2007 03:21 EDT

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