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NEW YORK - Oil prices climbed above US$63 a barrel on Friday as dense fog delayed crude shipments to refineries along the US Gulf Coast a day after Opec agreed to cut output for a second time in two months.
US crude rose 81 cents to US$63.32 a
barrel by 1930 GMT. London Brent was up 51 cents at US$63.40.
"The Opec cut is there and the ship channel fog supports things a bit," said John Kilduff, senior vice president for the Energy Risk Management Group at Fimat USA.
Dozens of ships have been delayed since Thursday by a thick sea fog blanketing the Houston Ship Channel, and other parts of the Gulf Coast, cutting the region's many oil refineries off from fresh crude supplies.
Forecasts predict the fog will linger on and off for five days and oil companies have warned a prolonged disruption to shipments could force them to reduce fuel output.
"If there were no oil deliveries for two days, we would be concerned," said David McKinney, a spokesman for Shell Oil which operates a joint venture refinery near Houston.
The shipping disruptions come a day after producer group Opec decided to cut supply by 500,000 barrels per day, or 2 per cent, effective Feb. 1. That follows a cut of 1.2 million bpd agreed from Nov. 1.
"Opec's decision is short-term bullish for prices," Mike Wittner, analyst at investment bank Calyon, said. "We got a reaction yesterday and we may get a further one today."
On Thursday, US crude rose more than US$1 a barrel after the decision to cut output by Opec, which is the source of more than a third of the world's oil.
The new cut "represents a move to more aggressive market management by Opec, and a seeming willingness of Saudi Arabia to defend US$60 a barrel" for US crude, PFC Energy said in a report.
Ample inventories and mild weather across much of the United States, the world's top oil consumer, limited the rally.
Heating demand will average much below normal in the US Northeast in the next five days, private forecaster DTN Meteorlogix said. The six-to-10-day forecast for the region was for temperatures to be mostly above normal, DTN said.
Opec has continued to pump about 1 million bpd above its current output target in December, Geneva-based consultant Petrologistics said on Friday.
Excluding Iraq, which is not part of Opec deals to limit supply, Opec output was expected to average 27.3 million bpd in December, steady from November, according to Petrologistics.
Crude oil stocks in the United States, the world's top oil consumer, fell 4.3 million barrels last week. They still stood at their highest level since 1998 for this time of year.
US crude oil has hovered around the US$60-a-barrel mark for the past three months as Opec's first cut helped arrest a 25 per cent slide from a record high of US$78.40 a barrel in July.
Also supporting prices on Friday was a fresh attack on the oil industry in Nigeria, the world's eighth-largest exporter.
Gunmen invaded an oil field control station operated by Royal Dutch Shell in Nigeria's Bayelsa state and were holding several people hostage, a company spokesman said.
- REUTERS
