19 August 2005, 10:12  Oil prices climb in Asian trade on Ecuador crisis

Oil prices climbed toward 64 usd a barrel in Asian trade after protests forced Ecuador to suspend crude exports, underscoring market nervousness over supply disruptions, dealers said. Forecasts of hotter-than-expected weather in the US through September also helped push prices higher because it means there will be bigger demand for electricity to keep airconditioners running, they said. At 12.00 noon (0400 GMT), New York's main contract, light sweet crude for delivery in September, advanced 49 cents to 63.76 usd a barrel from its close of 63.27 usd in the US overnight. Prices have lost more than 3 usd since hitting historic highs of 67.10 usd a barrel on August 12. Dariusz Kowalczyk, a Hong Kong-based investment strategist at CFC Seymour Securities, said the production shutdown and suspension of exports by Ecuador's state oil firm Petroecuador following the protests sent shockwaves through the market. Ecuador is South America's fifth largest oil producer and more than half of its exports go to the US. The country normally produces 200,000 barrels of oil a day. "The market is concerned about short supplies and even 200,000 barrels is able to make people nervous," Kowalczyk said. Ecuador declared a state of emergency on Wednesday amid mounting protests in the Amazon's main oil-producing region by demonstrators demanding a renegotiation of contracts with foreign oil firms. The protesters have occupied 200 oil facilities and airports in Lago Agrio and El Coca provinces. Kowalczyk also said forecasts of hotter-than-expected weather patterns in the US through September helped boost prices because "this means there will be bigger demand for energy." Prices were expected to trend higher in Asian trading hours as traders close positions ahead of the weekend, he added.

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