NEW YORK _ Oil prices edged up Monday after briefly surpassing $99 a barrel on signs of colder weather in the United States and Europe and worries about weakness of the U.S. dollar.
The Thanksgiving holiday on Thursday marked the unofficial start of winter in the United States. Among other areas, southeastern New Mexico got up to 22.86 centimetres of snow and experienced colder than normal temperatures over the holiday weekend. Snow also fell in Germany over the weekend.
“The onset of cold U.S. weather is going to boost fuel demand,‘‘ said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Light, sweet crude for January delivery on the New York Mercantile Exchange added 13 cents to $98.31 a barrel in electronic trading by midafternoon in Europe, after reaching a high of $99.11 earlier Monday.
On Friday, the contract rose 89 cents to settle at a closing record of $98.18 a barrel.
January Brent crude fell six cents to $95.70 a barrel on the ICE Futures exchange.
Meanwhile, the dollar fell slightly against the euro on Monday as speculation continued that the American credit crisis will lead to another cut in U.S. interest rates.
“The weakened U.S. dollar remains at record low levels and so we‘ve got pricing trying to test $100 again,‘‘ Shum said.
Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the U.S. currency is falling.
Nymex crude prices reached a trading record of $99.29 a barrel on Wednesday, and are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
“Almost anything could push prices higher from here and we have to expect to see a move to‘‘ $100 per barrel this week, said Peter Beutel, president of U.S. energy risk management firm Cameron Hanover, in a research note, listing a U.S. Federal Reserve interest rate cut, a weaker U.S. dollar, colder weather forecasts or “any petro-political problem‘‘ among the factors which could push oil prices to three digits.
“We have reached the point, though, where the inability to touch or break $100 this week would be seen as rather a spectacular failure,‘‘ Beutel wrote.
Shum said that data suggesting OPEC is increasing production more quickly than expected is likely to keep a temporary cap on crude oil prices.
Oil Movements, an oil tanker tracking firm based in Britain, reported that Organization of Petroleum Exporting Countries oil exports are likely to jump by an average of 720,000 barrels a day in the four weeks ended Dec. 8, more than the expected 500,000 barrels per day.
Crude oil prices rose 43 per cent between August and early November on falling domestic inventories, concerns about supply disruptions overseas and, many analysts argue, speculative buying. But recent forecasts have suggested high prices are cutting demand.
Nymex heating oil rose 1.08 cents to $2.7150 a gallon while gasoline prices gained 0.58 cent to $2.4728 a gallon. Natural gas futures rose 19.9 cents to $7.899 per 1,000 cubic feet.
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Monday, November 26, 2007
Thursday, November 22, 2007
Oil prices dip after flirting with 100 dollars
LONDON (AFP) — World oil prices eased on Thursday, one day after striking record peaks near to 100 dollars per barrel on concerns over weak crude supplies and the falling dollar.
Investors took a cautious stance to protect their positions since US floor trading was shut Thursday owing to the Thanksgiving holiday, analysts said.
New York's main contract, light sweet crude for January delivery, fell 39 cents to 96.90 dollars per barrel in electronic trade. The contract had hit an historic high of 99.29 dollars on Wednesday.
Elsewhere Thursday, London's Brent North Sea crude for January delivery slipped 21 cents to 94.63 dollars per barrel, after striking an all-time peak of 96.53 dollars on Wednesday.
"We have come up just short of 100 dollars twice now, so there is strong resistance (there)," Sucden analyst Michael Davies said in London.
Oil prices had failed to top 100 dollars per barrel on Wednesday, despite official data which showed that US energy stockpiles fell more heavily than expected last week.
David Moore, a commodity strategist with the Commonwealth Bank of Australia, said he had expected prices to rise after the disappointing US energy report.
"I thought the inventory data would be supportive of the market," Moore said. "It may have been investors were cautious ahead of the Thanksgiving holiday."
The US Department of Energy (DoE) announced Wednesday that reserves of US crude oil had sunk by 1.1 million barrels in the week ending November 16.
Analysts' consensus forecast had been for a gain of 750,000 barrels.
The DoE added that US reserves of distillates, including crucial heating fuel and diesel, dived by 2.4 million barrels last week. That was far heavier than market expectations for a drop of 450,000 barrels.
Heating fuel demand is expected to pick up as the Northern hemisphere winter kicks in next month. The US northeast region is the world's biggest user of heating oil.
Moore said the market can expect continued volatility in the weeks ahead as tight global supplies and geopolitical tensions in the Middle East continue to worry investors.
"The oil prices are certainly volatile and the outlook is obviously subjected to a lot of uncertainty. For that reason, we will see oil prices move higher in the near term ... it is still possible for oil prices to go above 100 dollars," he added.
Crude oil prices have surged by about 64 percent since the start of 2007, supported by supply disruptions in key producers such as Nigeria, geopolitical jitters over the Iranian nuclear crisis, and strong demand from China and India.
Oil prices were also winning support from a troubled dollar, which is striking a series of record low points against the surging euro.
A weak greenback encourages demand for dollar-priced commodities because they become more attractive to investors using stronger currencies.
Wednesday, November 21, 2007
Oil prices breach record $US99
OIL prices rose above $S99 dollars per barrel in Asian trade today, within striking distance of the $US100-dollar level, as the US dollar slumped further, dealers said.
Concerns over tight global supplies was also helping push prices up, they said. The New York contract had closed at a new record of $US98.03 overnight.
In early morning Asian trade, oil prices pushed even higher.
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Tuesday, November 20, 2007
Oil prices hit record highs amid dollar weakness
NEW YORK (AFP) — World oil prices soared to new records Tuesday, breaching 98 dollars a barrel in New York, amid supply concerns and as the US dollar continued to weaken against other major currencies.
New York's main oil futures contract, light sweet crude for January delivery, soared 3.39 dollars to close at 98.03 dollars per barrel.
Prices in New York hit an all-time high of 98.62 dollars on November 7 during intraday trading, but Tuesday marked the first time prices had closed above 98 dollars.
In London, the price of Brent North Sea crude for January delivery surged 3.21 dollars to settle at 95.49 dollars per barrel, smashing a prior high of 95.19 dollars struck in November 7.
In after-hours trade, Brent crude was trading at even higher levels, at 96.24 dollars a barrel.
Some analysts believe oil prices could soon strike 100 dollars a barrel, especially as oil demand is being stoked by China and India's breakneck economic growth.
"Oil prices were higher today, with the dollar reaching fresh record lows against the euro and still coming off against other major currencies," Sucden analyst Michael Davies said.
The European single currency leapt to a historic peak above 1.48 dollars. The weakening dollar makes dollar-denominated commodities like oil cheaper for buyers armed with stronger currencies.
The market also continued to focus on the state of global energy supplies.
"Oil markets remain tight," analysts from the Commonwealth Bank of Australia said.
Despite supplies being strained ahead of the northern hemisphere winter, OPEC opted not to jack up its production quotas following a meeting in Saudi Arabia over the weekend.
The Organization of the Petroleum Exporting Countries (OPEC) has been under pressure, in particular from the United States, to boost supply to help cool prices.
However, OPEC's final declaration on Sunday after the meeting urged world peace to help stabilize prices and included a commitment to help fight global warming.
OPEC, which pumps 40 percent of global crude supplies, last decided to raise output in September when the oil producers' cartel agreed to provide an extra 500,000 barrels a day to the market, effective from November 1.
Some traders believe the ongoing weakness in the dollar will prompt OPEC to seek higher prices for oil, if not to move away from the currency all together.
"(OPEC) producers have seen their purchasing power decline with the dip in value of the greenback," said Bank of Ireland analyst Paul Harris.
OPEC has said it would hold off any discussion regarding production until its next meeting in December.
"The apparent removal of the possibility of increased supply will serve to at least underpin crude oil at these (price) levels," Harris said.
Monday, November 19, 2007
Oil prices rise after OPEC summit
NEW YORK (AFP) — World oil prices rose Monday amid tight crude supplies heading into the northern hemisphere winter as traders assessed the outcome of an OPEC summit held in Saudi Arabia over the weekend.
New York's main oil futures contract, light sweet crude for January delivery, closed up 80 cents at 94.64 dollars per barrel.
In London, Brent North Sea crude for January delivery settled up 66 cents at 92.28 dollars per barrel.
"Crude futures were firmer after the OPEC meeting over the weekend in Riyadh ended without the cartel signalling any increases of oil on top of the current quota," said Sucden analyst Michael Davies.
In the run-up to the two-day summit, the Organization of the Petroleum Exporting Countries (OPEC) had been under pressure to increase supplies to help cool prices which some analysts believe could soon strike 100 dollars.
A final declaration on Sunday from the oil exporters' group urged world peace to help stabilize prices and included a commitment to help fight global warming.
OPEC, which pumps 40 percent of global crude supplies, last decided to raise output in September when the oil producers's cartel agreed to provide an extra 500,000 barrels a day to the market, effective from November 1.
However, an influential London-based research group warned that oil supplies would remain tight in the coming months.
"While benchmark oil prices have retreated from the 100-dollar threshold they threatened to break in recent weeks, the oil market is likely to remain tight over the winter months, as the additional oil works its way slowly through the supply chain," the Centre for Global Energy Studies (CGES) said.
The CGES added in a monthly market report: "Signs that the global economy may be heading for a slowdown are undermining longer-term forecasts of oil demand growth, suggesting that prices could fall sharply next year.
"The path of oil prices over the coming months will be greatly influenced by how OPEC reacts to any downward correction."
Although some OPEC ministers expressed concern that expensive crude would eventually dampen demand for oil, they indicated that blame for the near triple-figure price lay outside the cartel.
"The apparent removal of the possibility of increased supply will serve to at least underpin crude oil at these levels," Bank of Ireland analyst Paul Harris said.
"The factors that have precipitated the move to record levels remain intact."
Heating fuel demand typically peaks during winter especially in the northeast region of the United States.
Crude futures had last week slumped further from all-time highs of 98.62 dollars in New York and 95.19 dollars in London as OPEC and the International Energy Agency downgraded their forecasts for global oil demand. Prices were also hit by news of a surprise increase to US energy inventories.
US crude oil futures end higher
NYMEX
US crude oil futures ended higher on Friday, on short-covering before expiry of the December contract, with a weakened dollar providing support.
Heating oil and gasoline futures racked up good gains with demand seen rising next week, with the US Thanksgiving holiday on Thursday.
On the New York Mercantile Exchange, December crude settled up $US1.67, or 1.8 per cent, at $US95.10 a barrel, after moving from $93.20 to $95.73. Players with short December positions covered to avoid having to make physical delivery.
US crude stocks rose last week, government data showed on Thursday, fuelling the sell-off. But storage at the Cushing, Oklahoma, delivery hub for NYMEX-traded oil remained at the three-year low of 13.4 million barrels, a supportive factor.
January crude settled up $US1.77, or 1.9 per cent, at $US93.84 a barrel, trading from $US91.81 to $US94.36.
NYMEX crude hit $98.62, a front-month record, on Nov. 7.
In London, January Brent crude ended up $1.39, or 1.5 per cent, at $91.62 a barrel, trading from $90 to $91.95.
LONDON METAL EXCHANGE
Copper touched a three-month low on Friday, hit by falling equity markets and worries about weakening demand before short-covering pushed prices into positive terrain ahead of the session's close.
Lead traded at levels last seen two months ago, led down by technical selling after falling below support at $3,450 a tonne.
Copper for delivery in three months on the London Metal Exchange fell as low as $6,785 per tonne, its lowest level since August 18, before prices recovered to close at $7,040.
Prices bounced ahead of the close on short-covering, traders said. Investors were buying back assets previously sold to close out short positions as many expected prices to fall further.
On Thursday, copper shed 3 per cent before closing at $6,920.
Three-months lead futures on the LME closed at $3,315 after touching $3,310, down 5.2 per cent. In the previous session, lead was indicated at $3,490/3,500.
Copper, used extensively in construction and wiring, had a brief boost on Wednesday when a big earthquake struck Chile, the world's top producer of the metal. Investors, afraid of a major supply disruption, raced to buy the metal.
Now, with damage to production thought to be limited, bearish sentiment, fanned by increasing risk aversion in global markets, worries over the health of the US economy and signs of weakening Chinese buying, is dominating the market.
US industrial production unexpectedly fell in October, recording its biggest decline since a matching drop in January, in a troubling sign for an economy already struggling under the weight of a housing downturn.
Data from the International Copper Study Group (ICSG) showed the copper market had a deficit of 258,000 tonnes between January and August this year, against a surplus of 38,000 tonnes in the same year-ago period.
Three-months tin closed at $17,400 against $17,375/17,400 on Thursday. It hit an all-time high of $17,575 earlier this week.
Three-months zinc was down at $2,525/2,530 from $2,590, aluminium was $20 lower at $2,550 and nickel was at $31,250 versus $31,700.
COMEX
US gold futures reversed early gains to finish a tad lower on Friday, capping an extremely volatile week as investors opted to lock in profits after initially hunting for bargains based on a weaker dollar and rising crude oil prices.
However, bullion dealers said the sharp fall in gold prices this week had not triggered a significant amount of physical buying.
Platinum futures also rebounded 2 per cent, after the world's biggest platinum producer slashed its output forecast for this year.
Most-active December gold on the COMEX division of the New York Mercantile Exchange trimmed initial gains but was settled down 30 cents at $787.00 an ounce. It traded between $785.60 and $798.40.
At mid-afternoon on Wall, spot gold was quoted at $784.80/785.50 an ounce, compared with $785.80/786.60 in New York Thursday afternoon. London bullion dealers fixed the afternoon spot reference price at $789.75.
COMEX December silver closed up 2.8 cents at $14.510 an ounce, trading between $14.365 and $14.745.
Spot silver was quoted at $14.44/14.49 an ounce, compared with $14.35/14.40 late Thursday in New York. London silver was fixed at $14.45.
Dealers said platinum benefited as Anglo Platinum, the world's biggest platinum producer, cut this year's output forecast to between 2.45 million and 2.5 million ounces of refined platinum from its previous forecast.
NYMEX January platinum ended up $27.80 or 2 per cent at $1,453.20 an ounce. Spot platinum was quoted at $1,446/1,451.
December palladium declined $5.10 or 1.4 per cent to close at $365.85 an ounce. Spot palladium was at $365/368.
Saturday, November 17, 2007
Rise in inventories sends oil price falling
U.S. crude oil stockpiles climbed 2.81 million barrels to 314.7 million last week, the first gain in four weeks, the Energy Department said. A 750,000 barrel decline was expected, according to a Bloomberg News survey. Imports rose to the highest level since the week that ended Aug. 17.
"The jump in imports was enough for refiners to increase runs and still leave additional barrels to build stocks," said Tim Evans, an analyst with Citigroup Global Markets in New York. "The rise in imports is evidence that the declines we saw in recent weeks were a function of inventory management, not a shortage of oil."
Crude oil for December delivery closed down 66 cents at $93.43 a barrel on the New York Mercantile Exchange. Futures climbed to $98.62 on Nov. 7, the highest intraday price since trading began in 1983. Prices are up 57 percent from a year ago.
Brent crude oil for December settlement fell $1.14 to $90.22 a barrel on the London-based ICE Futures Europe exchange. Brent reached $95.19 a barrel on Nov. 7, the highest point since trading began in 1988.
Imports of crude oil rose 8.6 percent to 10.5 million barrels in the week that ended Nov. 9, the report showed.
"The gain shouldn't have been a surprise because there was no way that imports were going to stay so low," said Brad Samples, commodity analyst for Summit Energy Services in Kentucky. "The premium of WTI over Brent and some West African grades is a strong incentive to send barrels to the U.S. This should continue to boost inventories."
Total implied fuel demand in the United States averaged 20.6 million barrels a day in the four weeks that ended Nov. 9, down 0.7 percent from a year earlier, the Energy Department report showed. The Energy Department measures shipments from refineries, pipelines and terminals to calculate fuel demand.
"Even if demand here were to fall 5 percent, we would still see global growth because of what's happening in India and China," said Adam Hewison, president of INO.com, a Web site that provides technical analysis and financial news.
Source
Oil Rises More Than $1 on Signs OPEC's Lost Control of Prices
By Mark Shenk
Nov. 16 (Bloomberg) -- Crude oil rose more than $1 a barrel on speculation that the Organization of Petroleum Exporting Countries has lost control of prices.
``OPEC can't do anything about the price,'' Venezuela's oil minister Rafael Ramirez said today in Riyadh, Saudi Arabia, where OPEC is holding a heads-of-state summit this weekend. Oil prices could reach $100 a barrel ``soon,'' he said. The December futures contract in New York expired today.
``OPEC could make things worse with a constrictive output policy but they can't lower prices with additional output,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``The expiration of the December contract is adding a lot of volatility to the market. Open interest is plunging so there's a lack of liquidity.''
Crude oil for December delivery rose $1.67, or 1.8 percent, to $95.10 a barrel at 2:51 p.m. on the New York Mercantile Exchange. The more-active January contract rose $1.77, or 1.9 percent, to close at $93.84 a barrel. Futures climbed to $98.62 on Nov. 7, the highest intraday price since trading began in 1983. Prices are up 69 percent from a year ago.
Prices dropped 1.3 percent this week, only the second weekly decline since August.
Brent crude oil for January settlement rose $1.39, or 1.5 percent, to close at $91.62 a barrel on the London-based ICE Futures Europe exchange. Brent reached $95.19 a barrel on Nov. 7, the highest since trading began in 1988.
Abu Dhabi Meeting
OPEC's next meeting on production policy will be held on Dec. 5 in Abu Dhabi. The group was founded in 1960, holds three- quarters of the world's oil reserves and accounts for more than 40 percent of current production.
``There was talk earlier that OPEC might increase production in Abu Dhabi,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``As the market went down the silence was deafening. If prices head back to the $97 to $98 level, we will probably start hearing about additional barrels coming on the market.''
Oil prices have increased more than 20 percent since Sept. 11, when OPEC decided to increase output by 500,000 barrels a day starting Nov. 1.
``This is a leadership meeting and there's no expectation that production policy will change,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``This might have a bigger impact on the foreign exchange markets than on the oil market. There are a number of concerns about U.S. policy concerning the dollar.''
Falling Dollar
The U.S. dollar declined against the euro, enhancing the appeal of commodities as an investment. Commodities often move in the opposite direction of the U.S. currency. A lower dollar makes oil relatively cheaper in the countries using other currencies.
Saudi Arabia, the world's largest oil exporter, won't discuss pricing oil in currencies other than the U.S. dollar, Saudi Foreign Minister Prince Saud Al-Faisal said, speaking at a meeting of OPEC oil and finance ministers today. Venezuela and Iran have pushed for discussions on pricing oil in currencies other than the dollar.
``As for the monetary aspect and the dollar I would like to ask his Excellency, the minister of Iran, to leave this question to the appropriate party, the ministers of finance, without mentioning that we gave them this task so that there won't be negative impact from OPEC,'' Al-Faisal said today, speaking in reaction to an Iranian proposal to discuss the currency.
``I don't think the market needs more oil,'' Algerian Oil Minister Chakib Khelil told reporters in Riyadh. He voiced concern that the global economy is weakening because of the subprime mortgage crisis in the U.S., and this may be reducing demand for fuel. ``This month, there is lower demand in China, lower demand in the U.S,'' Khelil said.
U.S. Inventories
Prices fell yesterday after the Energy Department reported that U.S. crude-oil stockpiles climbed 2.81 million barrels last week, the first gain in four weeks. Analysts surveyed by Bloomberg expected the report to show a decline.
``This is the fourth week that prices have rallied on Friday,'' Barakat said. ``We also came off strongly yesterday, which may be in part responsible for the move today.''
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .
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