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SYDNEY - Oil was steady around US$71 yesterday after surging nearly 2 per cent at the end of last week, as refinery problems rekindled petrol supply concerns and strong US economic data helped offset credit market anxiety.
US crude for October delivery lost 7c to US$71.02 a barrel after soaring US$1.26 on Friday, when it rose for a second day from its lowest in nearly two months. London Brent shed 2c to US$70.60 a barrel.
Analysts said fresh news of refinery outages in the United States would further tighten petrol supplies, which unexpectedly fell by 5.7 million barrels in the week before.
Chevron said on Friday it expected some crude shipments to its Pascagoula, Mississippi refinery, one of the 10 biggest in the United States, to be cancelled or rerouted following a fire at a crude unit.
A shutdown of a 22,500 barrels per day petrol-making unit at an oil refinery in Big Spring, Texas, due to an equipment malfunction also helped boost prices of the auto fuel on Friday.
Prices were also aided by strong US economic data released on Friday, which analysts said underlined the economy's sturdiness before the subprime credit crisis unravelled, and would calm some jitters about the impact of the recent market turmoil on the wider economy.
Sales of new single-family homes unexpectedly rose in July and new orders for durable goods posted the biggest gains since September, reports from the Commerce Department showed on Friday.
More economic data due this week, including July existing home sales and preliminary second-quarter gross domestic product, could shed more light on the health of the real economy.
With prices hovering well below record highs of US$78.77 a barrel struck on August 1, Opec nations appeared unlikely to take any dramatic action when they meet next month.
- Reuters
