By Gillian Wong, Associated Press Writer
SINGAPORE (AP) -- Oil prices rose Tuesday on expectations of further declines in U.S. crude oil stocks, fueling concerns that supplies may be inadequate going into the Northern Hemisphere winter.
Market participants expect the U.S. Energy Department on Wednesday to report that oil inventories fell last week, in part because of a suspension of output at Mexico's state oil company Petroleos Mexicanos, a major crude exporter to the United States.
Last week, crude futures jumped more than US$4 after figures showed a sharp, unexpected drop in U.S. crude inventories for the second week in a row.
"The oil market is really supported by the tight inventories in the U.S. market and the general expectations for the inventory report this week are that the crude inventories will likely fall," said Victor Shum of Purvin & Gertz in Singapore.
Analysts think some traders and investors will try to push oil prices to the psychologically important US$100 level this week. Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, US$38 a barrel then would be worth US$96 to US$103 or more today.
NVDL: Matt Simmons, author of Twilight in the Desert, and one time advisor to President Bush says the following:
If I was redoing Twilight in the Desert today, I'd sharpen the severity of the warning quite significantly.
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