Oil price inches higher on tight supply

A larger than expected drawndown in US crude inventories is boosting oil prices Wednesday with the benchmark Brent trading higher at $50.40 per barrel.

A  report by Goldman Sachs said the price of Brent  rose for a third day in a row to it’s highest level in just over eight months, and was making fresh highs in early trade on Wednesday, helped by industry data showing a larger-than-expected drawdown in US crude inventories, worries about attacks on Nigeria’s oil industry and strong Chinese demand.

In Nigeria contrary earlier report, the repair work on a key Nigerian crude oil pipeline operated by Royal Dutch Shell Plc is ongoing under very tight security, according to a person familiar with the operations.

The repairs were being carried out in two different sites of the Forcados export pipeline, which was hit by explosions in February and again last week, said the person, who asked not to be named because of security concerns.

Earlier Chief Financial Officer Simon Henry said the company had to withdraw repair crews last week after a second attack against the 48-inch Forcados pipeline that links onshore storage tanks with an offshore port.

Another OPEC member  Saudi Arabia says it is considering a plan to tax millions of foreign residents as the kingdom seeks to reduce its reliance on oil revenue after the plunge in crude prices.

The proposal was included in the country’s National Transformation Plan, an ambitious multi-year program released this week. But the tax element is only “an initiative that will be discussed,” Finance Minister Ibrahim al-Assaf said on Tuesday at a news conference in Jeddah.

“It is in reality an old proposal, and it was presented in the past, but it is one of the initiatives that will be raised by the finance ministry.”

Gulf producer Qatar will double its capacity for processing condensate by almost 150kbbl/day in August when trials begin on a new splitter at the Ras Laffan refinery with commercial production starting by October, a Qatar Petroleum official said.

Condensate exports from Qatar will drop from the current 500kbbl/day to about 350kbbl/day when the 146kbbl/day splitter starts operating, said the official, who declined to be named as he was not authorised to speak publicly.