Gas prices continue to fluctuate even though experts predicted that by mid-September, the national average would be around $3.35 for a gallon of regular gasoline. Today's gasoline prices are at an average $3.65 which is more expensive than it was a month ago, and nearly $1 per gallon higher than this time last year.
Analysts attributed the price shifts to the combined forces of a chaotic situation in Libya and the recent lashing of Hurricane Irene, followed by Labor Day weekend, when gas prices always seem to rise a bit.
More on this from this link.
Tuesday, September 13, 2011
Thursday, August 11, 2011
Crude down in Asian trade
SINGAPORE– Oil tumbled in Asian trade Friday due to a stronger dollar as global financial markets remained on edge on worries over the struggling US economy and the European debt crisis.
Analysts said prices are expected to be volatile, mirroring developments in the financial markets and the global economy.
New York’s main contract, West Texas Intermediate light sweet crude for delivery in September, fell 47 cents to $85.25 per barrel.
Brent North Sea crude for September delivery dipped 57 cents to $107.45.
“The US dollar has strengthened and that puts some downward pressure on oil, but this is part of the volatility of the markets,” said Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.
A stronger dollar makes dollar-priced oil more expensive, leading to softer demand and pushing prices lower.
Shum added that oil price movements will largely be “depending on headlines”, referring to news that can influence investors’ behaviour.
Crude prices fluctuated sharply in US trade on Thursday before following stock markets higher as bargain hunting and less bearish economic outlooks took hold in the markets.
“Growth concerns have pinned back oil prices at six-month lows, but current market turmoil distracts from supportive market fundamentals,” said Lawrence Eagles of JPMorgan Chase.
“However, with future economic growth becoming a central concern, we consider the implications for demand and supply if growth downgrades continue and what lessons, if any, the recession of 2008 provides,” he said in a client note.
Source.
Analysts said prices are expected to be volatile, mirroring developments in the financial markets and the global economy.
New York’s main contract, West Texas Intermediate light sweet crude for delivery in September, fell 47 cents to $85.25 per barrel.
Brent North Sea crude for September delivery dipped 57 cents to $107.45.
“The US dollar has strengthened and that puts some downward pressure on oil, but this is part of the volatility of the markets,” said Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.
A stronger dollar makes dollar-priced oil more expensive, leading to softer demand and pushing prices lower.
Shum added that oil price movements will largely be “depending on headlines”, referring to news that can influence investors’ behaviour.
Crude prices fluctuated sharply in US trade on Thursday before following stock markets higher as bargain hunting and less bearish economic outlooks took hold in the markets.
“Growth concerns have pinned back oil prices at six-month lows, but current market turmoil distracts from supportive market fundamentals,” said Lawrence Eagles of JPMorgan Chase.
“However, with future economic growth becoming a central concern, we consider the implications for demand and supply if growth downgrades continue and what lessons, if any, the recession of 2008 provides,” he said in a client note.
Source.
Oil Prices Back on Track to Rise After Def Pledges Low Rate to 2013
On Wednesday, the steep fall in oil prices came to an end after the U.S. Federal Reserve promised to extend near-zero interest rates for two more years.
On Tuesday, oil prices tumbled below $79 per barrel to its lowest level since September 2010 on the New York Mercantile Exchange. This was before the Fed statement about interest rates surfaced. However, after the news came out investors took a sigh of relief and the broader U.S. equity market jumped almost 4 percent to close above 11,200 points.
In London, Brent crude was up 4.06 percent to $106.73 per barrel on the ICE Futures Exchange. The benchmark oil for September delivery number was up 3.24, or 4.09 percent, to $82.54 per barrel on Wednesday in electronic trading on the New York Mercantile Exchange.
A report showing an unexpected decline in U.S. crude supplies also helped push oil prices higher.
The American Petroleum Institute said late Tuesday that crude inventories fell to 5.2 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.8 million barrels. Inventories of gasoline dropped 1.0 million barrels last week while distillates decreased 600,000 barrels, the API said.
However, some analysts have warned that prices could moderate later in the week as attention again focuses on the prospect of economic growth. "The impact of the Fed move will likely fade by week's end," MF Global analysts wrote in a note. "The Fed's move to keep rates depressed for so long is likely because the central bank realizes that growth will be tepid for some time to come. This scenario does not bode well for commodities, especially base metals and energy."
Analysts also expect crude to fall further as consumer demand falters amid muted economic growth in developed countries. "The global economic dynamics that set this sharp oil price decline into motion a few weeks ago remain very much intact and capable of forcing a price decline into the $70 to 75 zone," energy consultant Ritterbusch and Associates said in a report. "The main theme behind the oil trade of the past month remains one in which heightened economic uncertainties mainly related to Europe and the U.S. are bringing into clearer focus a significant downdraft in oil demand."
Just as oil prices started to move higher today, many of oil and gas company shares are also expected to trade heavily once the market opens Wednesday. Exxon Mobil Corp. (NYSE: XOM) shares were trading lower by 0.47 percent to $71.30 in pre-market trading today. ConocoPhillips last traded at $64.56, up 4.26 percent, and Chevron Corp. (NYSE: CVX) last traded at $93.40, up 3.49 percent, on Tuesday.
As oil prices move higher, the pressure on the U.S. dollar was seen on Wednesday. The dollar was trading lower against the euro at $1.4356 per euro, and 76.5250 yen for a dollar, lower by 0.93 percent.
The rebound in crude oil prices helped investors brush off a drop in July implied crude imports by China.
Source.
On Tuesday, oil prices tumbled below $79 per barrel to its lowest level since September 2010 on the New York Mercantile Exchange. This was before the Fed statement about interest rates surfaced. However, after the news came out investors took a sigh of relief and the broader U.S. equity market jumped almost 4 percent to close above 11,200 points.
In London, Brent crude was up 4.06 percent to $106.73 per barrel on the ICE Futures Exchange. The benchmark oil for September delivery number was up 3.24, or 4.09 percent, to $82.54 per barrel on Wednesday in electronic trading on the New York Mercantile Exchange.
A report showing an unexpected decline in U.S. crude supplies also helped push oil prices higher.
The American Petroleum Institute said late Tuesday that crude inventories fell to 5.2 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.8 million barrels. Inventories of gasoline dropped 1.0 million barrels last week while distillates decreased 600,000 barrels, the API said.
However, some analysts have warned that prices could moderate later in the week as attention again focuses on the prospect of economic growth. "The impact of the Fed move will likely fade by week's end," MF Global analysts wrote in a note. "The Fed's move to keep rates depressed for so long is likely because the central bank realizes that growth will be tepid for some time to come. This scenario does not bode well for commodities, especially base metals and energy."
Analysts also expect crude to fall further as consumer demand falters amid muted economic growth in developed countries. "The global economic dynamics that set this sharp oil price decline into motion a few weeks ago remain very much intact and capable of forcing a price decline into the $70 to 75 zone," energy consultant Ritterbusch and Associates said in a report. "The main theme behind the oil trade of the past month remains one in which heightened economic uncertainties mainly related to Europe and the U.S. are bringing into clearer focus a significant downdraft in oil demand."
Just as oil prices started to move higher today, many of oil and gas company shares are also expected to trade heavily once the market opens Wednesday. Exxon Mobil Corp. (NYSE: XOM) shares were trading lower by 0.47 percent to $71.30 in pre-market trading today. ConocoPhillips last traded at $64.56, up 4.26 percent, and Chevron Corp. (NYSE: CVX) last traded at $93.40, up 3.49 percent, on Tuesday.
As oil prices move higher, the pressure on the U.S. dollar was seen on Wednesday. The dollar was trading lower against the euro at $1.4356 per euro, and 76.5250 yen for a dollar, lower by 0.93 percent.
The rebound in crude oil prices helped investors brush off a drop in July implied crude imports by China.
Source.
Wednesday, August 3, 2011
Crude up in Asia on bargain hunting
Oil prices were up in Asia on Thursday as investors hunted for bargains after crude markets plunged in late US trade, analysts said.
New York’s main contract, light sweet crude for delivery in September, added 53 cents to 92.46 per barrel.
Brent North Sea crude for September delivery gained 39 cents to $113.62.
Crude traders were capitalising on cheap crude after it fell to one-month lows in late US trade Wednesday, analysts said.
“I think it’s just a temporary relief rally because oil prices were quite battered yesterday,” said Serene Lim, oil and gas analyst for ANZ bank in Singapore.
Crude markets had been dragged south on Tuesday by weak jobs creation and service sector growth numbers from the United States, prompting fears of a slowdown in the world’s largest oil consumer.
The Institute for Supply Management’s index released Wednesday showed the giant US service sector growing at a snail’s pace in July, with non-manufacturing activity dropping to 52.7 last month, barely above the 50 no-growth level.
US private sector hiring also slowed in July, with payrolls firm ADP reporting a net 114,000 jobs created by private, non-farm businesses last month compared with 145,000 in June.
Source.
New York’s main contract, light sweet crude for delivery in September, added 53 cents to 92.46 per barrel.
Brent North Sea crude for September delivery gained 39 cents to $113.62.
Crude traders were capitalising on cheap crude after it fell to one-month lows in late US trade Wednesday, analysts said.
“I think it’s just a temporary relief rally because oil prices were quite battered yesterday,” said Serene Lim, oil and gas analyst for ANZ bank in Singapore.
Crude markets had been dragged south on Tuesday by weak jobs creation and service sector growth numbers from the United States, prompting fears of a slowdown in the world’s largest oil consumer.
The Institute for Supply Management’s index released Wednesday showed the giant US service sector growing at a snail’s pace in July, with non-manufacturing activity dropping to 52.7 last month, barely above the 50 no-growth level.
US private sector hiring also slowed in July, with payrolls firm ADP reporting a net 114,000 jobs created by private, non-farm businesses last month compared with 145,000 in June.
Source.
Monday, June 6, 2011
Crude Oil Price Declines for a Third Day on Speculation OPEC Will Increase Quotas
Oil dropped for a third day in New York amid speculation OPEC may increase output quotas when it meets in Vienna tomorrow.
Futures slipped as much as 0.7 percent today after falling to the lowest in two weeks yesterday. The Organization of Petroleum Exporting Countries may raise production limits, Barclays Plc said June 6. The International Energy Agency said on May 19 it saw “an urgent need” for more oil to help bring down high prices threatening economies. Crude also slid on signs fuel demand is faltering along with slowing economic growth.
“The outcome of the OPEC meeting will be key,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 a barrel in the third quarter. “The growth outlook from the economic data looks like it’s hit a bit of a softer patch.”
Crude for July delivery slid as much as 68 cents to $98.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.52 at 12:16 p.m. Singapore time. The contract yesterday fell $1.21, or 1.2 percent, to $99.01. Prices are up 38 percent the past year.
Brent crude for July delivery was at $114.01 a barrel, down 47 cents, on the London-based ICE Futures Europe exchange. The contract yesterday lost $1.36, or 1.2 percent, to $114.48. Prices are 58 percent higher the past year.
Oil Bets
The European benchmark contract traded at a premium of $15.49 a barrel to U.S. futures today. The difference between front-month contracts in London and New York reached a record $19.54 on Feb. 21. It averaged 76 cents last year.
Options traders increased bets that oil prices will fall further. The most-active option yesterday was the July $95 put, which rose 17 cents to 79 cents. The second-most active contract was the August $90 put, which climbed 13 cents to $1.05.
“There is speculation that OPEC may raise production targets this week, on concerns from some OPEC members that higher oil prices are curbing demand,” economists at Australia & New Zealand Banking Group Ltd., led by Warren Hogan, wrote in a note today.
A “recalibration” of OPEC’s output target closer to actual output is expected, Barclays analysts led by London-based Paul Horsnell said in yesterday’s report.
OPEC Targets
The group will have to increase its production target by as much as 2.5 million barrels a day from 24.845 million or risk prices rising higher, according to a report from Johannes Benigni, chairman of consultant JBC Energy GmbH in Vienna.
“If OPEC doesn’t increase supply sufficiently it would be a tacit communication to the market that $100+ oil is acceptable,” said Benigni.
OPEC won’t announce a supply increase and will keep its formal production quota unchanged for an eighth consecutive meeting at the June 8 gathering, according to a Bloomberg survey of analysts conducted May 24-31. Venezuelan Oil Minister Rafael Ramirez also said the group is unlikely to raise production.
The OPEC members bound by the output quotas, not including Iraq, produced 26.2 million barrels a day in May, or about 1.4 million barrels over the limit, according to a Bloomberg News survey of analyst, producers and oil companies. Total supply was 28.895 million last month.
Brent has advanced 21 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya. In Syria, state television reported yesterday that more than 120 members of the security forces have been killed in the northern town of Jisr al-Shughour.
U.S. Stockpiles
A report from the U.S. Energy Department tomorrow may show U.S. gasoline stockpiles climbed by 1 million barrels last week from 212.3 million, according to a Bloomberg News survey of analysts. Crude inventories probably dropped 1.5 million barrels, the survey shows.
The U.S. unemployment rate unexpectedly climbed to 9.1 percent in May and payrolls grew at the slowest pace in eight months, the Labor Department reported June 3. Employers added 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000.
The Energy Department is scheduled to release its Short- term Energy Outlook today. The department last month cut its forecast for global oil consumption for this year to 88.08 million barrels a day from 88.2 million estimated in April.
Source. Oil dropped for a third day in New York amid speculation OPEC may increase output quotas when it meets in Vienna tomorrow.
Futures slipped as much as 0.7 percent today after falling to the lowest in two weeks yesterday. The Organization of Petroleum Exporting Countries may raise production limits, Barclays Plc said June 6. The International Energy Agency said on May 19 it saw “an urgent need” for more oil to help bring down high prices threatening economies. Crude also slid on signs fuel demand is faltering along with slowing economic growth.
“The outcome of the OPEC meeting will be key,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 a barrel in the third quarter. “The growth outlook from the economic data looks like it’s hit a bit of a softer patch.”
Crude for July delivery slid as much as 68 cents to $98.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.52 at 12:16 p.m. Singapore time. The contract yesterday fell $1.21, or 1.2 percent, to $99.01. Prices are up 38 percent the past year.
Brent crude for July delivery was at $114.01 a barrel, down 47 cents, on the London-based ICE Futures Europe exchange. The contract yesterday lost $1.36, or 1.2 percent, to $114.48. Prices are 58 percent higher the past year.
Oil Bets
The European benchmark contract traded at a premium of $15.49 a barrel to U.S. futures today. The difference between front-month contracts in London and New York reached a record $19.54 on Feb. 21. It averaged 76 cents last year.
Options traders increased bets that oil prices will fall further. The most-active option yesterday was the July $95 put, which rose 17 cents to 79 cents. The second-most active contract was the August $90 put, which climbed 13 cents to $1.05.
“There is speculation that OPEC may raise production targets this week, on concerns from some OPEC members that higher oil prices are curbing demand,” economists at Australia & New Zealand Banking Group Ltd., led by Warren Hogan, wrote in a note today.
A “recalibration” of OPEC’s output target closer to actual output is expected, Barclays analysts led by London-based Paul Horsnell said in yesterday’s report.
OPEC Targets
The group will have to increase its production target by as much as 2.5 million barrels a day from 24.845 million or risk prices rising higher, according to a report from Johannes Benigni, chairman of consultant JBC Energy GmbH in Vienna.
“If OPEC doesn’t increase supply sufficiently it would be a tacit communication to the market that $100+ oil is acceptable,” said Benigni.
OPEC won’t announce a supply increase and will keep its formal production quota unchanged for an eighth consecutive meeting at the June 8 gathering, according to a Bloomberg survey of analysts conducted May 24-31. Venezuelan Oil Minister Rafael Ramirez also said the group is unlikely to raise production.
The OPEC members bound by the output quotas, not including Iraq, produced 26.2 million barrels a day in May, or about 1.4 million barrels over the limit, according to a Bloomberg News survey of analyst, producers and oil companies. Total supply was 28.895 million last month.
Brent has advanced 21 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya. In Syria, state television reported yesterday that more than 120 members of the security forces have been killed in the northern town of Jisr al-Shughour.
U.S. Stockpiles
A report from the U.S. Energy Department tomorrow may show U.S. gasoline stockpiles climbed by 1 million barrels last week from 212.3 million, according to a Bloomberg News survey of analysts. Crude inventories probably dropped 1.5 million barrels, the survey shows.
The U.S. unemployment rate unexpectedly climbed to 9.1 percent in May and payrolls grew at the slowest pace in eight months, the Labor Department reported June 3. Employers added 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000.
The Energy Department is scheduled to release its Short- term Energy Outlook today. The department last month cut its forecast for global oil consumption for this year to 88.08 million barrels a day from 88.2 million estimated in April.
Source.
Futures slipped as much as 0.7 percent today after falling to the lowest in two weeks yesterday. The Organization of Petroleum Exporting Countries may raise production limits, Barclays Plc said June 6. The International Energy Agency said on May 19 it saw “an urgent need” for more oil to help bring down high prices threatening economies. Crude also slid on signs fuel demand is faltering along with slowing economic growth.
“The outcome of the OPEC meeting will be key,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 a barrel in the third quarter. “The growth outlook from the economic data looks like it’s hit a bit of a softer patch.”
Crude for July delivery slid as much as 68 cents to $98.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.52 at 12:16 p.m. Singapore time. The contract yesterday fell $1.21, or 1.2 percent, to $99.01. Prices are up 38 percent the past year.
Brent crude for July delivery was at $114.01 a barrel, down 47 cents, on the London-based ICE Futures Europe exchange. The contract yesterday lost $1.36, or 1.2 percent, to $114.48. Prices are 58 percent higher the past year.
Oil Bets
The European benchmark contract traded at a premium of $15.49 a barrel to U.S. futures today. The difference between front-month contracts in London and New York reached a record $19.54 on Feb. 21. It averaged 76 cents last year.
Options traders increased bets that oil prices will fall further. The most-active option yesterday was the July $95 put, which rose 17 cents to 79 cents. The second-most active contract was the August $90 put, which climbed 13 cents to $1.05.
“There is speculation that OPEC may raise production targets this week, on concerns from some OPEC members that higher oil prices are curbing demand,” economists at Australia & New Zealand Banking Group Ltd., led by Warren Hogan, wrote in a note today.
A “recalibration” of OPEC’s output target closer to actual output is expected, Barclays analysts led by London-based Paul Horsnell said in yesterday’s report.
OPEC Targets
The group will have to increase its production target by as much as 2.5 million barrels a day from 24.845 million or risk prices rising higher, according to a report from Johannes Benigni, chairman of consultant JBC Energy GmbH in Vienna.
“If OPEC doesn’t increase supply sufficiently it would be a tacit communication to the market that $100+ oil is acceptable,” said Benigni.
OPEC won’t announce a supply increase and will keep its formal production quota unchanged for an eighth consecutive meeting at the June 8 gathering, according to a Bloomberg survey of analysts conducted May 24-31. Venezuelan Oil Minister Rafael Ramirez also said the group is unlikely to raise production.
The OPEC members bound by the output quotas, not including Iraq, produced 26.2 million barrels a day in May, or about 1.4 million barrels over the limit, according to a Bloomberg News survey of analyst, producers and oil companies. Total supply was 28.895 million last month.
Brent has advanced 21 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya. In Syria, state television reported yesterday that more than 120 members of the security forces have been killed in the northern town of Jisr al-Shughour.
U.S. Stockpiles
A report from the U.S. Energy Department tomorrow may show U.S. gasoline stockpiles climbed by 1 million barrels last week from 212.3 million, according to a Bloomberg News survey of analysts. Crude inventories probably dropped 1.5 million barrels, the survey shows.
The U.S. unemployment rate unexpectedly climbed to 9.1 percent in May and payrolls grew at the slowest pace in eight months, the Labor Department reported June 3. Employers added 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000.
The Energy Department is scheduled to release its Short- term Energy Outlook today. The department last month cut its forecast for global oil consumption for this year to 88.08 million barrels a day from 88.2 million estimated in April.
Source. Oil dropped for a third day in New York amid speculation OPEC may increase output quotas when it meets in Vienna tomorrow.
Futures slipped as much as 0.7 percent today after falling to the lowest in two weeks yesterday. The Organization of Petroleum Exporting Countries may raise production limits, Barclays Plc said June 6. The International Energy Agency said on May 19 it saw “an urgent need” for more oil to help bring down high prices threatening economies. Crude also slid on signs fuel demand is faltering along with slowing economic growth.
“The outcome of the OPEC meeting will be key,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 a barrel in the third quarter. “The growth outlook from the economic data looks like it’s hit a bit of a softer patch.”
Crude for July delivery slid as much as 68 cents to $98.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.52 at 12:16 p.m. Singapore time. The contract yesterday fell $1.21, or 1.2 percent, to $99.01. Prices are up 38 percent the past year.
Brent crude for July delivery was at $114.01 a barrel, down 47 cents, on the London-based ICE Futures Europe exchange. The contract yesterday lost $1.36, or 1.2 percent, to $114.48. Prices are 58 percent higher the past year.
Oil Bets
The European benchmark contract traded at a premium of $15.49 a barrel to U.S. futures today. The difference between front-month contracts in London and New York reached a record $19.54 on Feb. 21. It averaged 76 cents last year.
Options traders increased bets that oil prices will fall further. The most-active option yesterday was the July $95 put, which rose 17 cents to 79 cents. The second-most active contract was the August $90 put, which climbed 13 cents to $1.05.
“There is speculation that OPEC may raise production targets this week, on concerns from some OPEC members that higher oil prices are curbing demand,” economists at Australia & New Zealand Banking Group Ltd., led by Warren Hogan, wrote in a note today.
A “recalibration” of OPEC’s output target closer to actual output is expected, Barclays analysts led by London-based Paul Horsnell said in yesterday’s report.
OPEC Targets
The group will have to increase its production target by as much as 2.5 million barrels a day from 24.845 million or risk prices rising higher, according to a report from Johannes Benigni, chairman of consultant JBC Energy GmbH in Vienna.
“If OPEC doesn’t increase supply sufficiently it would be a tacit communication to the market that $100+ oil is acceptable,” said Benigni.
OPEC won’t announce a supply increase and will keep its formal production quota unchanged for an eighth consecutive meeting at the June 8 gathering, according to a Bloomberg survey of analysts conducted May 24-31. Venezuelan Oil Minister Rafael Ramirez also said the group is unlikely to raise production.
The OPEC members bound by the output quotas, not including Iraq, produced 26.2 million barrels a day in May, or about 1.4 million barrels over the limit, according to a Bloomberg News survey of analyst, producers and oil companies. Total supply was 28.895 million last month.
Brent has advanced 21 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya. In Syria, state television reported yesterday that more than 120 members of the security forces have been killed in the northern town of Jisr al-Shughour.
U.S. Stockpiles
A report from the U.S. Energy Department tomorrow may show U.S. gasoline stockpiles climbed by 1 million barrels last week from 212.3 million, according to a Bloomberg News survey of analysts. Crude inventories probably dropped 1.5 million barrels, the survey shows.
The U.S. unemployment rate unexpectedly climbed to 9.1 percent in May and payrolls grew at the slowest pace in eight months, the Labor Department reported June 3. Employers added 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000.
The Energy Department is scheduled to release its Short- term Energy Outlook today. The department last month cut its forecast for global oil consumption for this year to 88.08 million barrels a day from 88.2 million estimated in April.
Source.
Sunday, June 5, 2011
Latest Oil Prices Dip
Brent crude slipped toward $115 a barrel on Monday on concern about demand after disappointing jobs data from top consumer United States, but a softer dollar and political upheaval in the Middle East limited losses.
The possibility that OPEC will raise supply when ministers meet this week also put pressure on prices. Gulf Arab members led by Saudi Arabia will push for a rise, but were likely to face opposition from OPEC's leading hawks Iran and Venezuela.
"Today there is no shortage of supply. OPEC will do its job," the chief executive of the French energy giant Total (TOTF.PA) said at a conference in Kuala Lumpur.
Brent crude fell 33 cents to $115.51 a barrel by 0340 GMT, after settling up 30 cents on Friday. U.S. crude slipped 8 cents to $100.13 a barrel.
"We are going to have sideways trade, basically because the weaker economy means weaker crude oil prices because of less demand in the U.S., but we have Yemen that's going to keep it high (along with) the weaker dollar," Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp, said.
U.S. data showed payrolls rose by 54,000 in May, the softest reading since September, and the country's jobless rate rose to 9.1 percent in May from 9 percent in April.
Falling oil demand and higher supplies in the world's largest economy are pushing prices lower, analysts said. U.S. crude oil stocks rose in the week to May 27 to their highest seasonal level for May since 1990.
TransCanada Corp's (TRP.TO) 591,000 barrel-per-day (bpd) capacity Keystone pipeline -- which carries oil from Alberta to the U.S. oil hub of Cushing -- resumed shipping crude oil, one week after being shut by a leak at a Kansas pumping station, the Calgary-based company said in a statement.
Technical charts indicated that oil prices may drop in the short term, with Brent expected to slip to $112 per barrel and U.S. oil expected to revisit the Friday low of $98.12 per barrel.
The dollar .DXY slid to a fresh one-month low against a basket of major currencies early in Asia on Monday, as the jobs data bolstered expectations that U.S. interest rates will stay low for longer.
"The value of the dollar and the way it's declining is keeping some of these commodities at levels which are not sustainable," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said.
MIDDLE EAST SUPPORTS
Violence in the Middle East underpinned prices due to worries that instability could spill over to some of the world's largest oil and gas producers and disrupt global supplies.
Yemeni President Ali Abdullah Saleh was recovering from an operation in Saudi Arabia to remove shrapnel from his chest while a truce between his troops and a tribal federation appeared to be holding.
Protesters, interpreting Saleh's absence as a sign that his grip on power was weakening, celebrated on the streets of Sanaa where they have been staging anti-government demonstrations since January.
Syrian forces shot dead 31 people in the last 48 hours during demonstrations in a northwestern town and official media said gunmen killed four policemen in the same town.
Protests against Syria's President Bashar al-Assad have grown despite reform gestures dismissed by the opposition and a continuing crackdown that has killed at least 1,100 people since the uprising erupted two months ago.
Source.
The possibility that OPEC will raise supply when ministers meet this week also put pressure on prices. Gulf Arab members led by Saudi Arabia will push for a rise, but were likely to face opposition from OPEC's leading hawks Iran and Venezuela.
"Today there is no shortage of supply. OPEC will do its job," the chief executive of the French energy giant Total (TOTF.PA) said at a conference in Kuala Lumpur.
Brent crude fell 33 cents to $115.51 a barrel by 0340 GMT, after settling up 30 cents on Friday. U.S. crude slipped 8 cents to $100.13 a barrel.
"We are going to have sideways trade, basically because the weaker economy means weaker crude oil prices because of less demand in the U.S., but we have Yemen that's going to keep it high (along with) the weaker dollar," Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp, said.
U.S. data showed payrolls rose by 54,000 in May, the softest reading since September, and the country's jobless rate rose to 9.1 percent in May from 9 percent in April.
Falling oil demand and higher supplies in the world's largest economy are pushing prices lower, analysts said. U.S. crude oil stocks rose in the week to May 27 to their highest seasonal level for May since 1990.
TransCanada Corp's (TRP.TO) 591,000 barrel-per-day (bpd) capacity Keystone pipeline -- which carries oil from Alberta to the U.S. oil hub of Cushing -- resumed shipping crude oil, one week after being shut by a leak at a Kansas pumping station, the Calgary-based company said in a statement.
Technical charts indicated that oil prices may drop in the short term, with Brent expected to slip to $112 per barrel and U.S. oil expected to revisit the Friday low of $98.12 per barrel.
The dollar .DXY slid to a fresh one-month low against a basket of major currencies early in Asia on Monday, as the jobs data bolstered expectations that U.S. interest rates will stay low for longer.
"The value of the dollar and the way it's declining is keeping some of these commodities at levels which are not sustainable," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said.
MIDDLE EAST SUPPORTS
Violence in the Middle East underpinned prices due to worries that instability could spill over to some of the world's largest oil and gas producers and disrupt global supplies.
Yemeni President Ali Abdullah Saleh was recovering from an operation in Saudi Arabia to remove shrapnel from his chest while a truce between his troops and a tribal federation appeared to be holding.
Protesters, interpreting Saleh's absence as a sign that his grip on power was weakening, celebrated on the streets of Sanaa where they have been staging anti-government demonstrations since January.
Syrian forces shot dead 31 people in the last 48 hours during demonstrations in a northwestern town and official media said gunmen killed four policemen in the same town.
Protests against Syria's President Bashar al-Assad have grown despite reform gestures dismissed by the opposition and a continuing crackdown that has killed at least 1,100 people since the uprising erupted two months ago.
Source.
Thursday, June 2, 2011
Oil edges up after falling below $US100
OIL edged up today, rebounding from earlier lows and holding close to the key level of $US100 a barrel as traders await more signals on the strength of the US economy.
Light, sweet crude oil for July delivery settled US11 cents higher at $US100.40 a barrel on the New York Mercantile Exchange, after dropping as low as $US98.46 a barrel earlier in the session. Brent crude oil on the ICE futures exchange ended $US1.04 higher at $US115.57 a barrel.
After a 2.4 per cent drop yesterday, oil prices fluctuated between gains and losses for much of the latest session. A US government report showing increases in oil and petrol stockpiles initially pushed crude oil lower, but prices quickly returned to the middle of a trading range between $US95 and $US105 that has held oil since mid May.
"We still have that gravitational pull toward the $US100 level. Whenever we move a couple bucks from that level, we seem to swing back again," said Jim Ritterbusch, head of oil-trading adviser Ritterbusch and Associates.
US oil stockpiles rose by 2.9 million barrels in the week ended May 27, according to data released by the Department of Energy. Analysts had expected stocks would fall, according to a Dow Jones Newswires survey. Gasoline stocks also rose, adding 2.6 million barrels in the fourth-straight week of increases.
Rising inventories have combined with a string of weak economic reports in recent days to keep pressure on crude oil prices. Yesterday, an index on manufacturing fell short of expectations, while a separate report said the private sector hired 38,000 workers last month, well short of the 190,000 expected by economists.
Early in the latest session, jobless claims saw only a modest decline, suggesting the important monthly jobs report, to be released late tonight (AEST), may be gloomier than analysts had thought.
Many investors have become more pessimistic on the state of the economy over the past month, which has factored into the drop in oil prices from above $US113 a barrel in early May. Concerns are growing that a slowdown in China along with issues related to euro-zone debt will weigh on the global recovery.
Earlier this week, economists from Bank of America-Merrill Lynch lowered their estimates for growth in 2011 US gross domestic product to 2 per cent from 2.8 per cent.
The threat of a slowdown already appears to be contributing to a drop in oil and fuel consumption, as businesses and consumers cut spending in the face of high prices.
US petrol stockpiles have increased for four straight weeks, the Energy Department data showed. In addition, US petrol demand for the Friday before Memorial Day, an important day of travel, fell by 3.7 per cent from a year ago, according to a MasterCard SpendingPulse report released on Tuesday.
"The fact that crude (oil) is still building, still finding its way into storage, it could be that we're seeing a little bit of a slowdown in demand," said Tom Bentz, a director at BNP Paribas Commodity Futures.
"In general, the market is vulnerable because of the weak economic data we've been seeing."
Source.
Light, sweet crude oil for July delivery settled US11 cents higher at $US100.40 a barrel on the New York Mercantile Exchange, after dropping as low as $US98.46 a barrel earlier in the session. Brent crude oil on the ICE futures exchange ended $US1.04 higher at $US115.57 a barrel.
After a 2.4 per cent drop yesterday, oil prices fluctuated between gains and losses for much of the latest session. A US government report showing increases in oil and petrol stockpiles initially pushed crude oil lower, but prices quickly returned to the middle of a trading range between $US95 and $US105 that has held oil since mid May.
"We still have that gravitational pull toward the $US100 level. Whenever we move a couple bucks from that level, we seem to swing back again," said Jim Ritterbusch, head of oil-trading adviser Ritterbusch and Associates.
US oil stockpiles rose by 2.9 million barrels in the week ended May 27, according to data released by the Department of Energy. Analysts had expected stocks would fall, according to a Dow Jones Newswires survey. Gasoline stocks also rose, adding 2.6 million barrels in the fourth-straight week of increases.
Rising inventories have combined with a string of weak economic reports in recent days to keep pressure on crude oil prices. Yesterday, an index on manufacturing fell short of expectations, while a separate report said the private sector hired 38,000 workers last month, well short of the 190,000 expected by economists.
Early in the latest session, jobless claims saw only a modest decline, suggesting the important monthly jobs report, to be released late tonight (AEST), may be gloomier than analysts had thought.
Many investors have become more pessimistic on the state of the economy over the past month, which has factored into the drop in oil prices from above $US113 a barrel in early May. Concerns are growing that a slowdown in China along with issues related to euro-zone debt will weigh on the global recovery.
Earlier this week, economists from Bank of America-Merrill Lynch lowered their estimates for growth in 2011 US gross domestic product to 2 per cent from 2.8 per cent.
The threat of a slowdown already appears to be contributing to a drop in oil and fuel consumption, as businesses and consumers cut spending in the face of high prices.
US petrol stockpiles have increased for four straight weeks, the Energy Department data showed. In addition, US petrol demand for the Friday before Memorial Day, an important day of travel, fell by 3.7 per cent from a year ago, according to a MasterCard SpendingPulse report released on Tuesday.
"The fact that crude (oil) is still building, still finding its way into storage, it could be that we're seeing a little bit of a slowdown in demand," said Tom Bentz, a director at BNP Paribas Commodity Futures.
"In general, the market is vulnerable because of the weak economic data we've been seeing."
Source.
Wednesday, June 1, 2011
Oil slides 2.4pc on US demand concerns
Light, sweet crude for July delivery settled down $US2.41, or 2.4 per cent, to $US100.29 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange, which has traded above $US100 a barrel since February, settled down $US2.20, or 1.9 per cent, to $US114.53 a barrel.
Crude ended lower after the ISM manufacturing index fell short of expectations, indicating growth in the energy-intensive manufacturing sector has not been as fast as economists expected. The index fell to 53.5 in May, compared with a forecast for 57. Readings above 50 indicate growth.
April's reading came in at 60.4.
"The manufacturing sector had been a big engine for growth," said Andy Lebow, senior vice-president for energy at MF Global. "It's very significant on the diesel (demand) side."
A separate report said the US private sector hired 38,000 new workers last month, well below the 190,000 expected by economists. The report, by payroll giant Automatic Data Processing and consultancy Macroeconomic Advisers, is also prompting worries about oil demand in the world's largest crude consumer.
"Soft data is what caused all this to happen, started the slide," said Mark Waggoner, president of Excel Futures.
The disappointing jobs reading comes ahead of the most closely watched report on US employment levels, the non-farm payrolls report, due on Friday.
Several reports have suggested the US economy struggled in May. Regional factory reports were weak, jobless claims remained high, and the Conference Board's consumer confidence index fell sharply last month.
Today's decline wiped out yesterday's gains. Oil futures rose more than 2 per cent yesterday on reports that European countries appeared closer to another bailout of Greece, as well as on the outage of TransCanada's Keystone pipeline network.
The pipeline network connects heavy oil fields in Alberta with the Nymex delivery point of Cushing, Oklahoma. Less oil flowing into Cushing is seen as easing the supply glut at the oil hub and supporting the Nymex contract.
The pipeline remained down for repairs today, spokesman Terry Cunha said.
Source.
Crude ended lower after the ISM manufacturing index fell short of expectations, indicating growth in the energy-intensive manufacturing sector has not been as fast as economists expected. The index fell to 53.5 in May, compared with a forecast for 57. Readings above 50 indicate growth.
April's reading came in at 60.4.
"The manufacturing sector had been a big engine for growth," said Andy Lebow, senior vice-president for energy at MF Global. "It's very significant on the diesel (demand) side."
A separate report said the US private sector hired 38,000 new workers last month, well below the 190,000 expected by economists. The report, by payroll giant Automatic Data Processing and consultancy Macroeconomic Advisers, is also prompting worries about oil demand in the world's largest crude consumer.
"Soft data is what caused all this to happen, started the slide," said Mark Waggoner, president of Excel Futures.
The disappointing jobs reading comes ahead of the most closely watched report on US employment levels, the non-farm payrolls report, due on Friday.
Several reports have suggested the US economy struggled in May. Regional factory reports were weak, jobless claims remained high, and the Conference Board's consumer confidence index fell sharply last month.
Today's decline wiped out yesterday's gains. Oil futures rose more than 2 per cent yesterday on reports that European countries appeared closer to another bailout of Greece, as well as on the outage of TransCanada's Keystone pipeline network.
The pipeline network connects heavy oil fields in Alberta with the Nymex delivery point of Cushing, Oklahoma. Less oil flowing into Cushing is seen as easing the supply glut at the oil hub and supporting the Nymex contract.
The pipeline remained down for repairs today, spokesman Terry Cunha said.
Source.
Friday, May 27, 2011
German Inflation Unexpectedly Eased in May as Price of Crude Oil Declined
Inflation in Germany, Europe’s largest economy, unexpectedly eased in May after oil prices dropped from a 2 1/2-year high.
The harmonized inflation rate fell to 2.4 percent from 2.7 percent in April, the Federal Statistics Office in Wiesbaden said today. Economists had expected inflation to hold at the highest level since September 2008, the median of 17 forecasts in a Bloomberg News survey showed. On the month, consumer prices declined 0.2 percent.
Oil prices have dropped 11 percent this month after breaching $114 a barrel in April, leaving households with more money to spend. European Central Bank officials have signaled they are ready to raise borrowing costs further to curb price pressures after increasing the benchmark interest rate to 1.25 percent last month, even as peripheral nations such as Greece, Portugal and Ireland remain mired in a sovereign-debt crisis.
“Today’s German inflation numbers are just a temporary breather,” said Carsten Brzeski, an economist at ING Group in Brussels. “Obviously, with these inflation numbers, the ECB won’t hastily rush to a June hike. The German data is also not soft enough to put the ECB off from another hike in July.”
On a non-harmonized basis, inflation slowed to 2.3 percent in May from 2.4 percent and prices were unchanged on the month, the statistics office said.
Price Mandate
VCI, the main association of German chemical companies, on May 17 raised its forecast for production, sales and prices this year in the industry, on increasing global demand.
“We have to avoid commodity-price increases becoming entrenched in longer-term inflation expectations, which could have second-round effects on wages and prices,” ECB President Jean-Claude Trichet said yesterday. “We are carefully monitoring the situation and we stand ready to do whatever is necessary to fulfill our mandate.”
Euro-area inflation probably remained at 2.8 percent this month, according to the median of 27 forecasts in a Bloomberg survey. The European Union’s statistics office in Luxembourg will publish the data on May 31. Economists in a separate survey forecast the ECB will raise its main lending rate to 1.75 percent by the end of the year.
The German economy grew 1.5 percent in the first quarter as companies boosted spending to meet increased export demand and construction rebounded from a slump in the previous three months. The government predicts growth of 2.6 percent this year after a record 3.6 percent expansion in 2010.
At the same time, countries from Greece to Portugal are struggling to grow amid a debt crisis that’s shaking the foundations of the single currency. The euro area will grow 1.6 percent this year after expanding 1.8 percent in 2010, the European Commission forecast this month.
Source.
The harmonized inflation rate fell to 2.4 percent from 2.7 percent in April, the Federal Statistics Office in Wiesbaden said today. Economists had expected inflation to hold at the highest level since September 2008, the median of 17 forecasts in a Bloomberg News survey showed. On the month, consumer prices declined 0.2 percent.
Oil prices have dropped 11 percent this month after breaching $114 a barrel in April, leaving households with more money to spend. European Central Bank officials have signaled they are ready to raise borrowing costs further to curb price pressures after increasing the benchmark interest rate to 1.25 percent last month, even as peripheral nations such as Greece, Portugal and Ireland remain mired in a sovereign-debt crisis.
“Today’s German inflation numbers are just a temporary breather,” said Carsten Brzeski, an economist at ING Group in Brussels. “Obviously, with these inflation numbers, the ECB won’t hastily rush to a June hike. The German data is also not soft enough to put the ECB off from another hike in July.”
On a non-harmonized basis, inflation slowed to 2.3 percent in May from 2.4 percent and prices were unchanged on the month, the statistics office said.
Price Mandate
VCI, the main association of German chemical companies, on May 17 raised its forecast for production, sales and prices this year in the industry, on increasing global demand.
“We have to avoid commodity-price increases becoming entrenched in longer-term inflation expectations, which could have second-round effects on wages and prices,” ECB President Jean-Claude Trichet said yesterday. “We are carefully monitoring the situation and we stand ready to do whatever is necessary to fulfill our mandate.”
Euro-area inflation probably remained at 2.8 percent this month, according to the median of 27 forecasts in a Bloomberg survey. The European Union’s statistics office in Luxembourg will publish the data on May 31. Economists in a separate survey forecast the ECB will raise its main lending rate to 1.75 percent by the end of the year.
The German economy grew 1.5 percent in the first quarter as companies boosted spending to meet increased export demand and construction rebounded from a slump in the previous three months. The government predicts growth of 2.6 percent this year after a record 3.6 percent expansion in 2010.
At the same time, countries from Greece to Portugal are struggling to grow amid a debt crisis that’s shaking the foundations of the single currency. The euro area will grow 1.6 percent this year after expanding 1.8 percent in 2010, the European Commission forecast this month.
Source.
Thursday, May 26, 2011
Crude Rises to Highest in Two Weeks on U.S. Fuel Demand; SocGen Sees $106
Oil traded near a two-week high in New York on signs of increased U.S. fuel demand after a government report showed inventories of diesel and heating oil fell in the world’s biggest crude-consuming nation.
Futures reached their highest since May 11 today after the Energy Department said yesterday that U.S. distillate supplies declined 2.04 million barrels to 141.1 million last week, the lowest since April 2009. Fuel demand climbed 2.2 percent. Oil may rise to $106 a barrel in coming weeks as prices mirror an early-May pullback in 2010 that launched a rally in the rest of that year, Societe Generale SA said.
“People are optimistic about a recovery even though the economics suggest otherwise,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year. “The fact that oil hasn’t broken through $95 on the downside is the key.”
Crude for July delivery on the New York Mercantile Exchange was at $101.22 a barrel at 9:14 a.m. London time, down 10 cents, after gaining as much as 58 cents to $101.90. Brent crude for July settlement was at $114.73 a barrel, down 23 cents, on the ICE Futures Europe exchange in London. The contract yesterday climbed $2.40, or 2.1 percent, to $114.93, the highest settlement since May 10.
China Power Shortages
“Distillates stole center stage from gasoline on worries about surging demand in China and India,” said Phil Flynn, vice president of research at PFGBest in Chicago.
China may face power shortages of 30 gigawatts this summer, the China Electricity Council said last month. The government suspended diesel exports to increase supplies for use in power generation.
U.S. distillate consumption was the highest since the week ended April 15, according to the Energy Department. Total fuel demand climbed 2.2 percent to 18.9 million barrels a day. Refineries operated at 86.3 percent of capacity, the most since Jan. 7.
Heating oil futures in New York climbed for a third day, gaining as much as 1.97 cents, or 0.7 percent, to $3 a gallon.
U.S. gasoline stockpiles increased 3.79 million barrels to 209.7 million, the biggest addition since February, according to the report. They were forecast to rise 450,000 barrels, according to the median of 14 analyst estimates in a Bloomberg News survey. Gasoline use dropped 0.3 percent to 9.03 million barrels a day.
Fibonacci Support
Crude oil supplies gained 616,000 barrels to 370.9 million. Stockpiles were forecast to decrease by 1.5 million barrels, according to the survey.
Oil in New York, heading for the first monthly decline since August, has rebounded from its Fibonacci support near $95 a barrel, a level based on weekly price swings over the past year, according to Stephanie Aymes, a cross-commodity technical analyst at Societe Generale. Crude will probably continue to trade “sideways” in coming weeks before climbing to $106, the next Fibonacci retracement level, she said.
Oil also gained after the Organization for Economic Cooperation and Development raised its forecast for U.S. growth this year. The economy will expand 2.6 percent, up from a November estimate of 2.2 percent, the organization said in its annual economic outlook published yesterday. The OECD maintained its forecasts for the world economy to expand 4.2 percent this year and 4.6 percent in 2012.
Schork Report
The dollar declined, making commodities more attractive as an investment. The Dollar Index, a measure of the greenback against six major currencies, fell as much as 0.6 percent today, the biggest decline since April 20.
The Bank of England may raise interest rates after its economy expanded in the first quarter, which may support oil prices, according to Stephen Schork, Villanova, Pennsylvania- based analyst at The Schork Group Inc.
“This would put pressure on the Bank of England to ramp up interest rates which would, in turn, increase the strength of sterling,” he said in today’s Schork Report. “A stronger sterling implies a weaker dollar, and a weaker dollar implies… that’s right, higher crude oil prices.”
Brent crude, the European benchmark contract, traded at a premium of $13.47 a barrel to U.S. futures, compared with $13.61 yesterday. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. It averaged 76 cents last year.
Brent has advanced 22 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya, Iran and Syria. Yemen’s President Ali Abdullah Saleh said fighting could drag the country into civil war and warned that those who seek to disrupt security would be met with force.
The Organization of Petroleum Exporting Countries will leave production quotas unchanged at its June 8 meeting in Vienna because there is enough oil to meet demand, Iraq’s Deputy Prime Minister Hussain al-Shahristani said yesterday.
Source.
Futures reached their highest since May 11 today after the Energy Department said yesterday that U.S. distillate supplies declined 2.04 million barrels to 141.1 million last week, the lowest since April 2009. Fuel demand climbed 2.2 percent. Oil may rise to $106 a barrel in coming weeks as prices mirror an early-May pullback in 2010 that launched a rally in the rest of that year, Societe Generale SA said.
“People are optimistic about a recovery even though the economics suggest otherwise,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year. “The fact that oil hasn’t broken through $95 on the downside is the key.”
Crude for July delivery on the New York Mercantile Exchange was at $101.22 a barrel at 9:14 a.m. London time, down 10 cents, after gaining as much as 58 cents to $101.90. Brent crude for July settlement was at $114.73 a barrel, down 23 cents, on the ICE Futures Europe exchange in London. The contract yesterday climbed $2.40, or 2.1 percent, to $114.93, the highest settlement since May 10.
China Power Shortages
“Distillates stole center stage from gasoline on worries about surging demand in China and India,” said Phil Flynn, vice president of research at PFGBest in Chicago.
China may face power shortages of 30 gigawatts this summer, the China Electricity Council said last month. The government suspended diesel exports to increase supplies for use in power generation.
U.S. distillate consumption was the highest since the week ended April 15, according to the Energy Department. Total fuel demand climbed 2.2 percent to 18.9 million barrels a day. Refineries operated at 86.3 percent of capacity, the most since Jan. 7.
Heating oil futures in New York climbed for a third day, gaining as much as 1.97 cents, or 0.7 percent, to $3 a gallon.
U.S. gasoline stockpiles increased 3.79 million barrels to 209.7 million, the biggest addition since February, according to the report. They were forecast to rise 450,000 barrels, according to the median of 14 analyst estimates in a Bloomberg News survey. Gasoline use dropped 0.3 percent to 9.03 million barrels a day.
Fibonacci Support
Crude oil supplies gained 616,000 barrels to 370.9 million. Stockpiles were forecast to decrease by 1.5 million barrels, according to the survey.
Oil in New York, heading for the first monthly decline since August, has rebounded from its Fibonacci support near $95 a barrel, a level based on weekly price swings over the past year, according to Stephanie Aymes, a cross-commodity technical analyst at Societe Generale. Crude will probably continue to trade “sideways” in coming weeks before climbing to $106, the next Fibonacci retracement level, she said.
Oil also gained after the Organization for Economic Cooperation and Development raised its forecast for U.S. growth this year. The economy will expand 2.6 percent, up from a November estimate of 2.2 percent, the organization said in its annual economic outlook published yesterday. The OECD maintained its forecasts for the world economy to expand 4.2 percent this year and 4.6 percent in 2012.
Schork Report
The dollar declined, making commodities more attractive as an investment. The Dollar Index, a measure of the greenback against six major currencies, fell as much as 0.6 percent today, the biggest decline since April 20.
The Bank of England may raise interest rates after its economy expanded in the first quarter, which may support oil prices, according to Stephen Schork, Villanova, Pennsylvania- based analyst at The Schork Group Inc.
“This would put pressure on the Bank of England to ramp up interest rates which would, in turn, increase the strength of sterling,” he said in today’s Schork Report. “A stronger sterling implies a weaker dollar, and a weaker dollar implies… that’s right, higher crude oil prices.”
Brent crude, the European benchmark contract, traded at a premium of $13.47 a barrel to U.S. futures, compared with $13.61 yesterday. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. It averaged 76 cents last year.
Brent has advanced 22 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya, Iran and Syria. Yemen’s President Ali Abdullah Saleh said fighting could drag the country into civil war and warned that those who seek to disrupt security would be met with force.
The Organization of Petroleum Exporting Countries will leave production quotas unchanged at its June 8 meeting in Vienna because there is enough oil to meet demand, Iraq’s Deputy Prime Minister Hussain al-Shahristani said yesterday.
Source.
Wednesday, May 25, 2011
Oil prices hit two-week high
Oil prices rose 2% today, climbing to two-week highs as an unexpected drop in US distillate inventories trumped a sharp rise in gasoline stocks and as a softer dollar supported fresh commodities buying.
Inventory data from the US Energy Information Administration showed distillate stocks, which include heating oil and diesel fuel, fell 2.04 million barrels to 141 million barrels last week, the lowest since April 2009.
The data overshadowed a larger-than-expected 3.79 million barrel build in gasoline stocks and an unexpected modest gain of 616,000 barrels in crude stocks.
US crude for July delivery settled $US1.73 higher, or 1.74%, at $US101.32 a barrel, the highest close since May 10.
In London, ICE Brent for July closed up $US2.40, or 2.1%, at $US114.93, also the highest settlement since May 10.
Prices had been lower in the early going on concerns about weak gasoline demand ahead of the US driving season that kicks off on the US Memorial Day holiday on May 30.
"The main component in today's rise in crude futures is the supportive drawdown in distillate stocks," said Rich Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
"We're also seeing a weaker dollar and higher prices in gold, silver and copper as supportive," he added.
The 19-commodity Reuters-Jefferies CRB index, a global commodities benchmark, rose 1.6%, gaining the most in a week and extending Tuesday's rise of 0.7%.
Oil trading volumes were moderate, with US crude down 18% from the 30-day average, with about an hour to go before the end of the day's trade. Brent crude volume was down about 8% from the 30-day average.
US June heating oil finished up 7.06 cents, or 2.43%, at $US2.9803 a gallon, also the highest since May 10.
Earlier, Brent rose on concerns about unrest in the Middle East and North Africa after violence escalated in Yemen while uncertainty over Libya's future festered as NATO strikes intensified.
South African President Jacob Zuma said he would visit Tripoli next week to discuss an exit strategy for Libyan leader Muammar Gaddafi in cooperation with the Turkish government.
Schism widens on market's course
Sharp upward revisions of oil price forecasts by Wall Street giants Goldman Sachs and Morgan Stanley have deepened the schism between oil bears and bulls to levels unseen since oil prices peaked in 2008, a Reuters monthly poll showed.
While bears cited weak demand and ebbing geopolitical risk premiums as reasons for oil to plunge to $US75 per barrel, bulls saw it soaring to $US140 due to supply shortages and the limited ability of OPEC to cushion any new disruption.
Further signs of weaker economic demand in the US appears to buttress bearish views about the future course of oil prices.
Data today showed a larger-than-expected drop in new orders for long-lasting US manufactured goods in April, the largest decline in six months.
The weak durable goods report could embolden economists to moderate their forecasts for the US second-quarter growth, analysts said.
US dependence on imported oil fell below 50% of total oil demand in 2010 for the first time in more than a decade due to the weak economy and the increasing number of fuel efficient vehicles, a report from the US Energy Department showed today.
Source.
Inventory data from the US Energy Information Administration showed distillate stocks, which include heating oil and diesel fuel, fell 2.04 million barrels to 141 million barrels last week, the lowest since April 2009.
The data overshadowed a larger-than-expected 3.79 million barrel build in gasoline stocks and an unexpected modest gain of 616,000 barrels in crude stocks.
US crude for July delivery settled $US1.73 higher, or 1.74%, at $US101.32 a barrel, the highest close since May 10.
In London, ICE Brent for July closed up $US2.40, or 2.1%, at $US114.93, also the highest settlement since May 10.
Prices had been lower in the early going on concerns about weak gasoline demand ahead of the US driving season that kicks off on the US Memorial Day holiday on May 30.
"The main component in today's rise in crude futures is the supportive drawdown in distillate stocks," said Rich Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
"We're also seeing a weaker dollar and higher prices in gold, silver and copper as supportive," he added.
The 19-commodity Reuters-Jefferies CRB index, a global commodities benchmark, rose 1.6%, gaining the most in a week and extending Tuesday's rise of 0.7%.
Oil trading volumes were moderate, with US crude down 18% from the 30-day average, with about an hour to go before the end of the day's trade. Brent crude volume was down about 8% from the 30-day average.
US June heating oil finished up 7.06 cents, or 2.43%, at $US2.9803 a gallon, also the highest since May 10.
Earlier, Brent rose on concerns about unrest in the Middle East and North Africa after violence escalated in Yemen while uncertainty over Libya's future festered as NATO strikes intensified.
South African President Jacob Zuma said he would visit Tripoli next week to discuss an exit strategy for Libyan leader Muammar Gaddafi in cooperation with the Turkish government.
Schism widens on market's course
Sharp upward revisions of oil price forecasts by Wall Street giants Goldman Sachs and Morgan Stanley have deepened the schism between oil bears and bulls to levels unseen since oil prices peaked in 2008, a Reuters monthly poll showed.
While bears cited weak demand and ebbing geopolitical risk premiums as reasons for oil to plunge to $US75 per barrel, bulls saw it soaring to $US140 due to supply shortages and the limited ability of OPEC to cushion any new disruption.
Further signs of weaker economic demand in the US appears to buttress bearish views about the future course of oil prices.
Data today showed a larger-than-expected drop in new orders for long-lasting US manufactured goods in April, the largest decline in six months.
The weak durable goods report could embolden economists to moderate their forecasts for the US second-quarter growth, analysts said.
US dependence on imported oil fell below 50% of total oil demand in 2010 for the first time in more than a decade due to the weak economy and the increasing number of fuel efficient vehicles, a report from the US Energy Department showed today.
Source.
Tuesday, May 24, 2011
Stocks Adrift As Traders Digest Renewed Bullish Calls On Oil
Stocks drifted lower Tuesday as investors digested a slew of economic news in the U.S. and abroad.
A prediction today from Goldman Sachs and Morgan Stanley about oil prices sent crude back near $100 per barrel. Those firms believe oil prices will increase through the rest of the year, which could mean higher prices at the pump.
The Commerce Department said new home sales increased 7.3% last month. The report also said inventory levels were falling while prices were going up.
Aside from the oil call, Goldman lowered its forecast for China's gross domestic product for this year and next due to unexpectedly weak economic data and high oil prices. Goldman now expects China's GDP to be 9.4% down from a prior forecast of 10%. And for 2012, the firm sees 9.2% growth, down from 9.4%.
As for company news, medical equipment maker Medtronic disappointed investors with its growth forecast and shares were down 1.5% on heavy volume.
Shares of AutoZone were up over 6% on stronger than expected results for its third quarter. The company's earnings jumped 12% over last year.
Source.
A prediction today from Goldman Sachs and Morgan Stanley about oil prices sent crude back near $100 per barrel. Those firms believe oil prices will increase through the rest of the year, which could mean higher prices at the pump.
The Commerce Department said new home sales increased 7.3% last month. The report also said inventory levels were falling while prices were going up.
Aside from the oil call, Goldman lowered its forecast for China's gross domestic product for this year and next due to unexpectedly weak economic data and high oil prices. Goldman now expects China's GDP to be 9.4% down from a prior forecast of 10%. And for 2012, the firm sees 9.2% growth, down from 9.4%.
As for company news, medical equipment maker Medtronic disappointed investors with its growth forecast and shares were down 1.5% on heavy volume.
Shares of AutoZone were up over 6% on stronger than expected results for its third quarter. The company's earnings jumped 12% over last year.
Source.
Monday, May 23, 2011
Oil slumps on weak jobs data, IEA output call
(Reuters) - Oil prices fell more than $1 on Thursday as weak U.S. economic data stoked worries about demand, and the International Energy Agency suggested members could release emergency stocks if OPEC failed to act.
The pull-back coincided with a broad decline across commodity markets, which are testing price floors following several weeks of volatile trade.
Oil volume was light at a quarter less than the 30-day average, suggesting many traders remained on the sidelines. The oil volatility index .OVX dipped to its lowest since May 5 as demand for options protection ebbed.
U.S. crude for June delivery settled $1.66 lower at $98.44, a day after rebounding when some buyers scooped up bargains. Prices touched a session high of $100.79, trading in a narrow range of between $96 to $101 for a sixth day.
"Some of the new longs that came into the market after the recent fall of about $20 a barrel are selling as the U.S. economic data this morning wasn't supportive," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
"The recent buyers pushed prices back to over $100, but they were disappointed with the data on weekly jobless claims and regional manufacturing and are bailing out," he added.
In London, ICE Brent for July delivery settled down 88 cents at $111.42, off the early session high of $113.04.
U.S. data showed weekly jobless benefit filings fell last week, yet claims remained above 400,000 for the sixth straight week, sparking labor market concerns.
Other data showed sales of previously owned U.S. homes fell in April while factory activity in the U.S. mid-Atlantic region grew much more slowly than expected this month, raising more concerns about economic growth.
Still, with unemployment down from a year ago there was some evidence that U.S. drivers were taking near-record $4 gasoline prices in stride.
Americans will cut other expenses rather than forsake highway holidays this Memorial Day weekend, travel group AAA said on Thursday, forecasting that the number of people hitting the road would be little changed from 2010.
The 19-commodity Reuters-Jefferies CRB index .CRB, a global benchmark for commodities, was down 1.4 percent, heading for its largest loss in a week.
IEA URGES PRODUCERS TO PUMP MORE
Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs.
IEA, a watchdog for 28 industrialized nations, suggested its members could release emergency stockpiles if OPEC failed to act, although U.S. officials played down prospects for using the Strategic Petroleum Reserve to tamp down prices.
The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8.
The 12-member Organization of the Petroleum Exporting Countries maintains that world oil supplies are adequate.
"The IEA is part of the equation today. Investors have to be saying to themselves, 'hey, they could be serious about pulling the trigger on reserves'," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
Also weighing on prices, UK consultancy Oil Movements forecast that seaborne oil exports from OPEC, excluding Angola and Ecuador, will rise by 420,000 barrels per day in the four weeks to June 4.
An unexpected drop in U.S. crude oil inventories last week and a large drop in stockpiles at the key Cushing, Oklahoma, delivery point for the U.S. oil futures contract further supported Wednesday's rally.
Source.
The pull-back coincided with a broad decline across commodity markets, which are testing price floors following several weeks of volatile trade.
Oil volume was light at a quarter less than the 30-day average, suggesting many traders remained on the sidelines. The oil volatility index .OVX dipped to its lowest since May 5 as demand for options protection ebbed.
U.S. crude for June delivery settled $1.66 lower at $98.44, a day after rebounding when some buyers scooped up bargains. Prices touched a session high of $100.79, trading in a narrow range of between $96 to $101 for a sixth day.
"Some of the new longs that came into the market after the recent fall of about $20 a barrel are selling as the U.S. economic data this morning wasn't supportive," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
"The recent buyers pushed prices back to over $100, but they were disappointed with the data on weekly jobless claims and regional manufacturing and are bailing out," he added.
In London, ICE Brent for July delivery settled down 88 cents at $111.42, off the early session high of $113.04.
U.S. data showed weekly jobless benefit filings fell last week, yet claims remained above 400,000 for the sixth straight week, sparking labor market concerns.
Other data showed sales of previously owned U.S. homes fell in April while factory activity in the U.S. mid-Atlantic region grew much more slowly than expected this month, raising more concerns about economic growth.
Still, with unemployment down from a year ago there was some evidence that U.S. drivers were taking near-record $4 gasoline prices in stride.
Americans will cut other expenses rather than forsake highway holidays this Memorial Day weekend, travel group AAA said on Thursday, forecasting that the number of people hitting the road would be little changed from 2010.
The 19-commodity Reuters-Jefferies CRB index .CRB, a global benchmark for commodities, was down 1.4 percent, heading for its largest loss in a week.
IEA URGES PRODUCERS TO PUMP MORE
Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs.
IEA, a watchdog for 28 industrialized nations, suggested its members could release emergency stockpiles if OPEC failed to act, although U.S. officials played down prospects for using the Strategic Petroleum Reserve to tamp down prices.
The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8.
The 12-member Organization of the Petroleum Exporting Countries maintains that world oil supplies are adequate.
"The IEA is part of the equation today. Investors have to be saying to themselves, 'hey, they could be serious about pulling the trigger on reserves'," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
Also weighing on prices, UK consultancy Oil Movements forecast that seaborne oil exports from OPEC, excluding Angola and Ecuador, will rise by 420,000 barrels per day in the four weeks to June 4.
An unexpected drop in U.S. crude oil inventories last week and a large drop in stockpiles at the key Cushing, Oklahoma, delivery point for the U.S. oil futures contract further supported Wednesday's rally.
Source.
Thursday, May 19, 2011
Oil prices fall on demand concerns
Oil prices fell today as weak US economic data stoked worries about demand, and the International Energy Agency suggested members could release emergency stockpiles if producers did not increase supply.
The price retreat cut short yesterday's rebound from sharp losses of about $US20 a barrel in two weeks that traders and analysts had called overdone.
The downturn, part of a broad decline for commodities, came a session after the sector had posted its biggest daily rise in two months.
The 19-commodity Reuters-Jefferies CRB index, a globl benchmark for commodities, was down 1%, heading for its largest loss in a week.
US crude for June delivery traded $US1.43 lower at $US98.67 barrel.
In London, ICE Brent for July delivery dropped 76 cents to $US111.54.
IEA urges producers to raise supply
Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs.
IEA, a watchdog group for 28 industrialised nations, suggested its members could release emergency stockpiles if OPEC failed to act.
The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8.
The 12-member Organization of the Petroleum Exporting Countries maintains that world oil supplies are adequate.
"The IEA is part of the equation today. Investors have to be saying to themselves, 'hey, they could be serious about pulling the trigger on reserves'," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
John Lipsky, IMF acting Managing Director, said the global recovery remained fragile and urged continued international support for shaky economies in Europe, where the debt crisis has also fed worries about energy demand.
Yesterday, oil prices rebounded after losing two straight days as buyers emerged to scoop up bargains, following the recent sharp decline in prices.
An unexpected drop in US crude oil inventories last week and a large drop in stockpiles at the key Cushing, Oklahoma, delivery point for the US oil futures contract further supported yesterday's rally.
Source.
The price retreat cut short yesterday's rebound from sharp losses of about $US20 a barrel in two weeks that traders and analysts had called overdone.
The downturn, part of a broad decline for commodities, came a session after the sector had posted its biggest daily rise in two months.
The 19-commodity Reuters-Jefferies CRB index, a globl benchmark for commodities, was down 1%, heading for its largest loss in a week.
US crude for June delivery traded $US1.43 lower at $US98.67 barrel.
In London, ICE Brent for July delivery dropped 76 cents to $US111.54.
IEA urges producers to raise supply
Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs.
IEA, a watchdog group for 28 industrialised nations, suggested its members could release emergency stockpiles if OPEC failed to act.
The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8.
The 12-member Organization of the Petroleum Exporting Countries maintains that world oil supplies are adequate.
"The IEA is part of the equation today. Investors have to be saying to themselves, 'hey, they could be serious about pulling the trigger on reserves'," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
John Lipsky, IMF acting Managing Director, said the global recovery remained fragile and urged continued international support for shaky economies in Europe, where the debt crisis has also fed worries about energy demand.
Yesterday, oil prices rebounded after losing two straight days as buyers emerged to scoop up bargains, following the recent sharp decline in prices.
An unexpected drop in US crude oil inventories last week and a large drop in stockpiles at the key Cushing, Oklahoma, delivery point for the US oil futures contract further supported yesterday's rally.
Source.
Wednesday, May 18, 2011
Oil price up in Asia
SINGAPORE—Oil rose in Asian trade on Thursday after US oil stockpiles did not increase as expected, analysts said.
New York’s main contract, light sweet crude for June delivery, advanced 13 cents to $100.23 a barrel and Brent North Sea crude for July delivery gained 13 cents to $112.43.
The US Department of Energy (DoE) in its weekly report Wednesday showed American crude stockpiles had failed to rise as expected in the week ending May 13.
Stockpiles steadied last week, bucking forecasts for a rise of 700,000 barrels, according to analysts polled by Dow Jones Newswires.
“This was one key reason why crude oil prices was performing impressively,” said Ker Chung Yang, a Singapore-based commodity analyst at Phillip Futures.
“Crude oil prices will likely hang around the $100 level for quite some time unless there is a strong impetus to bring it down,” Ker told AFP.
Traders closely monitor the DoE report for clues on US demand as it is the world’s biggest oil consumer.
Source.
New York’s main contract, light sweet crude for June delivery, advanced 13 cents to $100.23 a barrel and Brent North Sea crude for July delivery gained 13 cents to $112.43.
The US Department of Energy (DoE) in its weekly report Wednesday showed American crude stockpiles had failed to rise as expected in the week ending May 13.
Stockpiles steadied last week, bucking forecasts for a rise of 700,000 barrels, according to analysts polled by Dow Jones Newswires.
“This was one key reason why crude oil prices was performing impressively,” said Ker Chung Yang, a Singapore-based commodity analyst at Phillip Futures.
“Crude oil prices will likely hang around the $100 level for quite some time unless there is a strong impetus to bring it down,” Ker told AFP.
Traders closely monitor the DoE report for clues on US demand as it is the world’s biggest oil consumer.
Source.
Tuesday, May 17, 2011
Oil prices fall in choppy trading
Oil prices slipped today in choppy trading as weak economic data fuelled concerns about demand that have contributed to crude's 15% decline so far in May.
The US dollar index seesawed with the euro and the greenback's weakness late helped oil pare losses, traders and brokers said.
Oil felt pressure from news that US housing starts and building permits fell in April and factory output slumped.
US gasoline futures slid sharply early, then pared losses after tumbling nearly 5% the previous session on the receding threat to refineries from flooding in the Mississippi River delta.
Brent crude for July delivery dropped 85 cents to settle at $US109.99 a barrel, bouncing after earlier falling as low as $US108.07.
US crude for June delivery slipped 46 cents to end at a 12-week low settlement of $US96.91 a barrel, having dropped as low as $US95.02 on the day that June crude options expired on the New York Mercantile Exchange.
Traders and analysts noted open interest concentrated on puts at the June crude option $US95 strike price.
US crude trading volumes were 10% above the 30-day average, more robust than Brent volumes that were about 4% below.
"With the housing numbers coming in soft and industrial production coming in (near) flat, there is some concern there will be a double dip in the housing slump and on a broader scale for the economy as a whole," said Rob Kurzatkowski, futures analyst with OptionsXpress in Chicago.
"We're seeing further liquidation on the precious metals, and that's offering some outside pressure on the oil market as well."
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Copper ended lower for the first time in four sessions as the weak US economic data weighed on the industrial metal. Weak US retail and corporate earnings and the dollar's early strength pressured gold..
Concerns about the European debt crisis also weighed on oil, as investors watched to see if peripheral economies such as Greece and Portugal will be able to meet their obligations.
The euro bounced and rose against the dollar in choppy trading, but remained vulnerable on concerns Greece might restructure its massive debt.
The dollar index, measuring it against a basket of currencies, edged lower late after earlier being bolstered by the yen's weakness.
A stronger dollar can pressure dollar-denominated oil prices by raising the price for consumers using other currencies and pulling investment from commodities to less risky markets.
US oil inventories
US crude, gasoline and heating oil futures turned higher in post-settlement trading after a report from the industry group American Petroleum Institute showed gasoline and total distillate stocks fell last week.
Crude stocks rose 2.7 million barrels, gasoline stocks fell 676,000 barrels and distillates dropped 2.8 million barrels, the API said.
Ahead of the API report, a Reuters survey of analysts had forecast US crude inventories would be up for the fourth straight week, but only by 1 million barrels.
Gasoline stocks were seen up 800,000 barrels and distillate stockpiles up only 700,000 barrels.
"The report on its face is neutral, but the product draws continue to impress, especially given the retail price point," said John Kilduff, partner at Again Capital LLC in New York.
Rising water levels on the Mississippi River looked less likely to hurt eight refineries in Louisiana after US Army engineers began opening flood gates, helping US gasoline futures settle lower today.
The gasoline crack spread, or profit margin for refiners, pulled back more than $US3 to just below $US26 a barrel, after pushing above $US40 on May 10.
US retail gasoline demand fell last week compared with a year ago, but was up versus the previous week, a report from MasterCard Advisors' said on Tuesday.
Source.
The US dollar index seesawed with the euro and the greenback's weakness late helped oil pare losses, traders and brokers said.
Oil felt pressure from news that US housing starts and building permits fell in April and factory output slumped.
US gasoline futures slid sharply early, then pared losses after tumbling nearly 5% the previous session on the receding threat to refineries from flooding in the Mississippi River delta.
Brent crude for July delivery dropped 85 cents to settle at $US109.99 a barrel, bouncing after earlier falling as low as $US108.07.
US crude for June delivery slipped 46 cents to end at a 12-week low settlement of $US96.91 a barrel, having dropped as low as $US95.02 on the day that June crude options expired on the New York Mercantile Exchange.
Traders and analysts noted open interest concentrated on puts at the June crude option $US95 strike price.
US crude trading volumes were 10% above the 30-day average, more robust than Brent volumes that were about 4% below.
"With the housing numbers coming in soft and industrial production coming in (near) flat, there is some concern there will be a double dip in the housing slump and on a broader scale for the economy as a whole," said Rob Kurzatkowski, futures analyst with OptionsXpress in Chicago.
"We're seeing further liquidation on the precious metals, and that's offering some outside pressure on the oil market as well."
Advertisement
Copper ended lower for the first time in four sessions as the weak US economic data weighed on the industrial metal. Weak US retail and corporate earnings and the dollar's early strength pressured gold..
Concerns about the European debt crisis also weighed on oil, as investors watched to see if peripheral economies such as Greece and Portugal will be able to meet their obligations.
The euro bounced and rose against the dollar in choppy trading, but remained vulnerable on concerns Greece might restructure its massive debt.
The dollar index, measuring it against a basket of currencies, edged lower late after earlier being bolstered by the yen's weakness.
A stronger dollar can pressure dollar-denominated oil prices by raising the price for consumers using other currencies and pulling investment from commodities to less risky markets.
US oil inventories
US crude, gasoline and heating oil futures turned higher in post-settlement trading after a report from the industry group American Petroleum Institute showed gasoline and total distillate stocks fell last week.
Crude stocks rose 2.7 million barrels, gasoline stocks fell 676,000 barrels and distillates dropped 2.8 million barrels, the API said.
Ahead of the API report, a Reuters survey of analysts had forecast US crude inventories would be up for the fourth straight week, but only by 1 million barrels.
Gasoline stocks were seen up 800,000 barrels and distillate stockpiles up only 700,000 barrels.
"The report on its face is neutral, but the product draws continue to impress, especially given the retail price point," said John Kilduff, partner at Again Capital LLC in New York.
Rising water levels on the Mississippi River looked less likely to hurt eight refineries in Louisiana after US Army engineers began opening flood gates, helping US gasoline futures settle lower today.
The gasoline crack spread, or profit margin for refiners, pulled back more than $US3 to just below $US26 a barrel, after pushing above $US40 on May 10.
US retail gasoline demand fell last week compared with a year ago, but was up versus the previous week, a report from MasterCard Advisors' said on Tuesday.
Source.
Sunday, May 15, 2011
Oil Drops on U.S. Economy, Greece; BofA’s Blanch Sees Demand Destruction
Oil dropped for the first day in three in New York after President Barack Obama said failure to raise the U.S. debt ceiling may unravel global finances and threaten growth in the world’s biggest crude consumer.
Futures slipped as much as 1.3 percent after Obama said the U.S. “could have a worse recession than we’ve already had,” according to a segment taped for CBS’s “Face the Nation” program. Prices also slid on concern Greece’s debt crisis may worsen, threatening Europe’s economic growth. Oil may drop in the second half of the year amid signs prices are causing demand to slow, said Francisco Blanch, head of Global Commodity Research, Bank of America Merrill Lynch.
“At the moment, anything seen to adversely impact growth in the U.S. gets factored into oil prices,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted crude in New York will average $113 a barrel in the third quarter.
Crude for June delivery slid as much as $1.30 to $98.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.79 at 1:06 p.m. Sydney time. The contract gained 2.5 percent last week, the biggest weekly gain since the period ending April 8. Prices are 41 percent higher the past year.
Brent oil for June settlement lost 44 cents, or 0.4 percent, to $113.39 a barrel on the London-based ICE Futures Europe exchange. The contract advanced 4.3 percent last week.
The U.S. administration will begin stimulating domestic crude production to blunt rising gasoline prices with measures including encouraging drilling in Alaska and giving oil companies more time to comply with safety regulations, Obama said in his weekly address.
Mississippi Flooding
Gasoline prices outpaced crude, dropping 0.6 percent in New York, as flooding from the Mississippi River threatened the second-largest U.S. oil refinery. Futures for June delivery lost 1.7 cents to $3.0572 a gallon today.
Louisiana opened four of the 25 gates at the Morganza floodway, allowing the Mississippi River to pour into the Atchafalaya River basin. Inside the threatened area are 2,264 oil or natural gas wells that each day produce 19,278 barrels of crude, about 10 percent of Louisiana’s onshore total, and 252.6 million cubic feet of gas, according to the state.
The Mississippi was threatening to reach to a flow rate of 1.62 million cubic feet per second unless water was diverted, putting in peril the levees at Baton Rouge, home to an estimated 229,000 people and industrial areas that include an Exxon Mobil Corp. refinery, the company’s second largest U.S. facility.
Louisiana Refineries
Alon USA Energy Inc.’s refinery in Krotz Springs is in a zone under a mandatory evacuation order, St. Landry’s Parish spokeswoman Francine Sias said. Alon spokesman Blake Lewis said the parish had granted the company an extension. A temporary levee is being constructed by employees to protect the 83,000- barrel-a-day refinery and 243 nearby homes.
Oil prices will head lower in the July-to-December period amid signs of demand destruction, Blanch said at a media briefing in Hong Kong today. Brent may trade at an average $122 a barrel in the second quarter and $94 in the fourth, he said.
The European benchmark has climbed 20 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya, Algeria, Bahrain, Iran, Syria, Oman and Yemen.
Brent traded at a premium of $14.59 a barrel to U.S. futures, compared with $14.18 on May 13. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. The spread averaged 76 cents last year.
Yemen’s Joint Meetings Party, a coalition of six opposition groups, says a plan to end the country’s political crisis is dead following a visit by the chief envoy of Arab Gulf states seeking to broker a deal.
Source.
Futures slipped as much as 1.3 percent after Obama said the U.S. “could have a worse recession than we’ve already had,” according to a segment taped for CBS’s “Face the Nation” program. Prices also slid on concern Greece’s debt crisis may worsen, threatening Europe’s economic growth. Oil may drop in the second half of the year amid signs prices are causing demand to slow, said Francisco Blanch, head of Global Commodity Research, Bank of America Merrill Lynch.
“At the moment, anything seen to adversely impact growth in the U.S. gets factored into oil prices,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted crude in New York will average $113 a barrel in the third quarter.
Crude for June delivery slid as much as $1.30 to $98.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.79 at 1:06 p.m. Sydney time. The contract gained 2.5 percent last week, the biggest weekly gain since the period ending April 8. Prices are 41 percent higher the past year.
Brent oil for June settlement lost 44 cents, or 0.4 percent, to $113.39 a barrel on the London-based ICE Futures Europe exchange. The contract advanced 4.3 percent last week.
The U.S. administration will begin stimulating domestic crude production to blunt rising gasoline prices with measures including encouraging drilling in Alaska and giving oil companies more time to comply with safety regulations, Obama said in his weekly address.
Mississippi Flooding
Gasoline prices outpaced crude, dropping 0.6 percent in New York, as flooding from the Mississippi River threatened the second-largest U.S. oil refinery. Futures for June delivery lost 1.7 cents to $3.0572 a gallon today.
Louisiana opened four of the 25 gates at the Morganza floodway, allowing the Mississippi River to pour into the Atchafalaya River basin. Inside the threatened area are 2,264 oil or natural gas wells that each day produce 19,278 barrels of crude, about 10 percent of Louisiana’s onshore total, and 252.6 million cubic feet of gas, according to the state.
The Mississippi was threatening to reach to a flow rate of 1.62 million cubic feet per second unless water was diverted, putting in peril the levees at Baton Rouge, home to an estimated 229,000 people and industrial areas that include an Exxon Mobil Corp. refinery, the company’s second largest U.S. facility.
Louisiana Refineries
Alon USA Energy Inc.’s refinery in Krotz Springs is in a zone under a mandatory evacuation order, St. Landry’s Parish spokeswoman Francine Sias said. Alon spokesman Blake Lewis said the parish had granted the company an extension. A temporary levee is being constructed by employees to protect the 83,000- barrel-a-day refinery and 243 nearby homes.
Oil prices will head lower in the July-to-December period amid signs of demand destruction, Blanch said at a media briefing in Hong Kong today. Brent may trade at an average $122 a barrel in the second quarter and $94 in the fourth, he said.
The European benchmark has climbed 20 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya, Algeria, Bahrain, Iran, Syria, Oman and Yemen.
Brent traded at a premium of $14.59 a barrel to U.S. futures, compared with $14.18 on May 13. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. The spread averaged 76 cents last year.
Yemen’s Joint Meetings Party, a coalition of six opposition groups, says a plan to end the country’s political crisis is dead following a visit by the chief envoy of Arab Gulf states seeking to broker a deal.
Source.
Wednesday, May 11, 2011
Steep fall in oil, petrol halts trading
PETROL futures plunged today, pulling the price of oil with it, after an unexpected rise in US inventories.
The drop was so steep that it triggered a rare five-minute halt of all energy trading on the New York Mercantile Exchange for the first time in more than two years.
June reformulated petrol blendstock dropped 7.6 per cent, the biggest one-day percentage decline since February 2009.
Light, sweet crude oil for June delivery settled down $US5.67, or 5.5 per cent, to $US98.21 a barrel on the Nymex. Brent crude oil on the ICE futures exchange settled down $US5.06, or 4.3 per cent, to $US112.57 a barrel.
While petrol futures began the session lower, their slide steepened after the Energy Information Administration posted a surprise increase in US inventories, signalling slackening demand.
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"We went from anticipating a drop in gasoline inventories for last week to seeing a build instead," said Tim Evans, energy analyst at Citi Futures Perspective.
"That certainly sparked some selling out of the gasoline market."
The decline in petrol futures triggered a rare five-minute halt to energy trading, after the contract hit its daily trading limit of US25 cents. The limit was raised to US50c after trading resumed
All of the contracts revert to their old trading limits later today. Contracts trading on the ICE don't have trading limits and trading on that exchange wasn't halted, a spokesman said.
Energy trading on the Nymex was last halted on September 22, 2008, due to a surge in crude-oil prices.
Although the EIA report triggered the initial sell-off in petrol, the decline gathered significant momentum as the session went on.
Market participants said traders took profits off the table after petrol's steep climb in the previous session, exacerbating the decline. Petrol's premium over crude oil, called the "gas crack," hit a record $US38 a barrel yesterday before plunging more than $US5 today.
"You're seeing...profit-taking from people who did catch the move on the run-ups in the cracks," said Raymond Carbone, a floor broker and president of Paramount Options in New York.
Crude oil inventories rose 3.8 million barrels last week, the EIA said, exceeding analyst estimates. Supplies of distillates, including heating oil and diesel, fell 843,000 barrels.
The data suggest that demand for crude oil and petrol is softening ahead of the critical northern summer driving season.
The EIA report also said stockpiles in Cushing, Oklahoma, rose 1.1 million barrels to a near-record 41.6 million barrels.
Rising inventories at the key oil hub and Nymex delivery point have been depressing the price of the main Nymex crude oil contract this year. The discount of the Nymex's light, sweet crude-oil contract to Brent crude oil rose to above $US14 a barrel today.
Source.
The drop was so steep that it triggered a rare five-minute halt of all energy trading on the New York Mercantile Exchange for the first time in more than two years.
June reformulated petrol blendstock dropped 7.6 per cent, the biggest one-day percentage decline since February 2009.
Light, sweet crude oil for June delivery settled down $US5.67, or 5.5 per cent, to $US98.21 a barrel on the Nymex. Brent crude oil on the ICE futures exchange settled down $US5.06, or 4.3 per cent, to $US112.57 a barrel.
While petrol futures began the session lower, their slide steepened after the Energy Information Administration posted a surprise increase in US inventories, signalling slackening demand.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
"We went from anticipating a drop in gasoline inventories for last week to seeing a build instead," said Tim Evans, energy analyst at Citi Futures Perspective.
"That certainly sparked some selling out of the gasoline market."
The decline in petrol futures triggered a rare five-minute halt to energy trading, after the contract hit its daily trading limit of US25 cents. The limit was raised to US50c after trading resumed
All of the contracts revert to their old trading limits later today. Contracts trading on the ICE don't have trading limits and trading on that exchange wasn't halted, a spokesman said.
Energy trading on the Nymex was last halted on September 22, 2008, due to a surge in crude-oil prices.
Although the EIA report triggered the initial sell-off in petrol, the decline gathered significant momentum as the session went on.
Market participants said traders took profits off the table after petrol's steep climb in the previous session, exacerbating the decline. Petrol's premium over crude oil, called the "gas crack," hit a record $US38 a barrel yesterday before plunging more than $US5 today.
"You're seeing...profit-taking from people who did catch the move on the run-ups in the cracks," said Raymond Carbone, a floor broker and president of Paramount Options in New York.
Crude oil inventories rose 3.8 million barrels last week, the EIA said, exceeding analyst estimates. Supplies of distillates, including heating oil and diesel, fell 843,000 barrels.
The data suggest that demand for crude oil and petrol is softening ahead of the critical northern summer driving season.
The EIA report also said stockpiles in Cushing, Oklahoma, rose 1.1 million barrels to a near-record 41.6 million barrels.
Rising inventories at the key oil hub and Nymex delivery point have been depressing the price of the main Nymex crude oil contract this year. The discount of the Nymex's light, sweet crude-oil contract to Brent crude oil rose to above $US14 a barrel today.
Source.
Monday, May 9, 2011
Oil prices jump more than $5 a barrel today
Crude oil rose more than $5 a barrel today, topping $102 in New York, as it rebounded from the biggest weekly decline since 2008, Bloomberg News reported. Oil climbed on signals that the global economic recovery remains intact.
Futures rose 5.5 percent, the most in more than two months, after a report today showed German exports surged to a record in March and the U.S. Labor Department said last week that payrolls expanded. Prices also advanced on concern that a rising Mississippi River will flood Louisiana refineries.
“Some of the economic news has been stronger than expected, reducing worries about demand,” said Rick Mueller, a principal with ESAI Energy LLC in Wakefield, Massachusetts. “The Mississippi floods are increasing concern about disruptions, especially of the products.”
Crude oil for June delivery rose $5.37 to settle at $102.55 on the New York Mercantile Exchange, the biggest one- day gain since Feb. 22. Futures dropped 15 percent in the five days ended May 6, the largest weekly decline since December 2008. Prices are up 37 percent from a year ago.
North Sea Brent crude for June settlement increased $6.77, or 6.2 percent, to $115.90 a barrel on the London-based ICE Futures Europe exchange.
Source.
Futures rose 5.5 percent, the most in more than two months, after a report today showed German exports surged to a record in March and the U.S. Labor Department said last week that payrolls expanded. Prices also advanced on concern that a rising Mississippi River will flood Louisiana refineries.
“Some of the economic news has been stronger than expected, reducing worries about demand,” said Rick Mueller, a principal with ESAI Energy LLC in Wakefield, Massachusetts. “The Mississippi floods are increasing concern about disruptions, especially of the products.”
Crude oil for June delivery rose $5.37 to settle at $102.55 on the New York Mercantile Exchange, the biggest one- day gain since Feb. 22. Futures dropped 15 percent in the five days ended May 6, the largest weekly decline since December 2008. Prices are up 37 percent from a year ago.
North Sea Brent crude for June settlement increased $6.77, or 6.2 percent, to $115.90 a barrel on the London-based ICE Futures Europe exchange.
Source.
Wednesday, April 13, 2011
Crude Oil Plunges as Higher Prices Are Forecast to Curb Growth
Oil fell, capping the biggest two- day drop in almost 11 months, after the International Energy Agency and International Monetary Fund said that prices above $100 a barrel are starting to hurt the global economy and Goldman Sachs Group Inc. forecast a “substantial” correction.
Oil plunged 3.3 percent after the IEA reported signs of an oil-demand “slowdown” in its monthly Oil Market Report today. The IMF cut its growth forecasts yesterday for the U.S. and Japan, two of the top three oil-consuming countries. Brent oil may drop more than $15 to $105 a barrel, Goldman said in a note to clients today.
“Right now, we’re in free-fall range,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “We have a market condition that was way overbought, so now its length is getting stomped out of the market. There could be a ways to go in this selloff.”
Crude oil for May delivery fell $3.67 to $106.25 a barrel on the New York Mercantile Exchange, the lowest settlement since March 30. Prices have tumbled 5.8 percent since April 8, the biggest two-day retreat since May 14 and 17, 2010. Futures have risen 26 percent in the past year.
Prices declined from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles rose 1.19 million barrels to 355.5 million. May oil was down $3.90, or 3.6 percent, to $106.02 a barrel in electronic trading at 4:33 p.m.
‘The Surest Remedy’
“There are real risks that a sustained $100-plus price environment will prove incompatible with the currently expected pace of economic recovery,” the Paris-based IEA said. “The surest remedy for high prices may ultimately prove to be high prices themselves.”
The U.S. today boosted its crude-oil price forecast for 2011 to an average $106.38 a barrel from $101.77 a barrel last month, according to the Energy Department’s Short-Term Energy Outlook. It left its global consumption forecast unchanged at 88.2 million barrels a day.
Yesterday, the Paris-based IEA said worldwide oil demand will rise by 1.4 million barrels, or 1.6 percent, this year to average 89.4 million a day. The forecast was unchanged from March.
The U.S., the world’s largest economy, will expand 2.8 percent this year, down from 2.9 percent last year and a 3 percent growth rate for 2011 forecast in January, the IMF said yesterday. It cut Japan’s 2011 growth forecast to 1.4 percent from 1.6 percent in a January forecast.
Confirming Suspicions
“Yesterday’s IMF statement that the U.S. and Japan economies are being hurt by higher energy prices confirmed everybody’s suspicions,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. “We’ll move back to the $104-$105 level where we’ve got some technical support.”
Brent oil for May settlement fell $3.06, or 2.5 percent, to end the session at $120.92 a barrel on the London-based ICE Futures Europe exchange.
The oil market will pull back toward a $105-a-barrel near- term target for Brent, David Greely in New York and Jeffrey Currie in London said in the Goldman report. They cited high inventories and spare production capacity.
“There’s fundamental support for the market, just at a lower level than prices had risen,” Greely, head of energy research at Goldman Sachs, said in a telephone interview. “There’s support longer term, particularly in 2012. Prices simply rose sooner than the physical market supports.”
U.S. crude oil stockpiles probably increased 1 million barrels last week, according to a survey of 16 analysts before an Energy Department report tomorrow.
Commodity Basket
Yesterday, oil tumbled from a 30-month high of $112.79 a barrel as Goldman Sachs ended a recommendation to buy a basket of commodities including crude oil, copper, cotton and platinum, saying the risks outweigh any further potential gain. The basket of raw materials was first recommended by Currie on Dec. 1. It had gained 25 percent since then.
“The Goldman thing is probably one of the bigger factors,” said Kyle Cooper, director of research for IAF Advisors in Houston. “A whole lot of the market is still dictated by money flow. You’ve got a situation where Goldman decided to take profits.”
The so-called CCCP basket had a 40 percent weighting in oil, 20 percent in copper, 10 percent in soybeans, 10 percent cotton and 20 percent platinum.
Japanese Nuclear Crisis
Oil also fell today after Japan’s Nuclear and Industrial Safety Agency raised the severity rating of its nuclear crisis at the Fukushima Dai-Ichi station to the highest level, matching the severity of the 1986 Chernobyl disaster and boosting concern that the crisis will curb Japanese demand.
The accident at the plant followed a record earthquake and tsunami on March 11.
“No matter how much oil people think they’re going to export to Japan to make up for the nuclear loss, we’re going to see that economy take a turn for the worse,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “If Japan really starts to deteriorate, its biggest trade partner is China, and they’re going to feel it next.”
China is the second-biggest oil-consuming country.
Oil volume in electronic trading on the Nymex was 993,886 contracts as of 4:33 p.m. in New York. Volume totaled 747,902 contracts yesterday, 6.3 percent below the average of the past three months and the highest level since March 16. Open interest was 1.57 million contracts.
Source.
Oil plunged 3.3 percent after the IEA reported signs of an oil-demand “slowdown” in its monthly Oil Market Report today. The IMF cut its growth forecasts yesterday for the U.S. and Japan, two of the top three oil-consuming countries. Brent oil may drop more than $15 to $105 a barrel, Goldman said in a note to clients today.
“Right now, we’re in free-fall range,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “We have a market condition that was way overbought, so now its length is getting stomped out of the market. There could be a ways to go in this selloff.”
Crude oil for May delivery fell $3.67 to $106.25 a barrel on the New York Mercantile Exchange, the lowest settlement since March 30. Prices have tumbled 5.8 percent since April 8, the biggest two-day retreat since May 14 and 17, 2010. Futures have risen 26 percent in the past year.
Prices declined from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles rose 1.19 million barrels to 355.5 million. May oil was down $3.90, or 3.6 percent, to $106.02 a barrel in electronic trading at 4:33 p.m.
‘The Surest Remedy’
“There are real risks that a sustained $100-plus price environment will prove incompatible with the currently expected pace of economic recovery,” the Paris-based IEA said. “The surest remedy for high prices may ultimately prove to be high prices themselves.”
The U.S. today boosted its crude-oil price forecast for 2011 to an average $106.38 a barrel from $101.77 a barrel last month, according to the Energy Department’s Short-Term Energy Outlook. It left its global consumption forecast unchanged at 88.2 million barrels a day.
Yesterday, the Paris-based IEA said worldwide oil demand will rise by 1.4 million barrels, or 1.6 percent, this year to average 89.4 million a day. The forecast was unchanged from March.
The U.S., the world’s largest economy, will expand 2.8 percent this year, down from 2.9 percent last year and a 3 percent growth rate for 2011 forecast in January, the IMF said yesterday. It cut Japan’s 2011 growth forecast to 1.4 percent from 1.6 percent in a January forecast.
Confirming Suspicions
“Yesterday’s IMF statement that the U.S. and Japan economies are being hurt by higher energy prices confirmed everybody’s suspicions,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. “We’ll move back to the $104-$105 level where we’ve got some technical support.”
Brent oil for May settlement fell $3.06, or 2.5 percent, to end the session at $120.92 a barrel on the London-based ICE Futures Europe exchange.
The oil market will pull back toward a $105-a-barrel near- term target for Brent, David Greely in New York and Jeffrey Currie in London said in the Goldman report. They cited high inventories and spare production capacity.
“There’s fundamental support for the market, just at a lower level than prices had risen,” Greely, head of energy research at Goldman Sachs, said in a telephone interview. “There’s support longer term, particularly in 2012. Prices simply rose sooner than the physical market supports.”
U.S. crude oil stockpiles probably increased 1 million barrels last week, according to a survey of 16 analysts before an Energy Department report tomorrow.
Commodity Basket
Yesterday, oil tumbled from a 30-month high of $112.79 a barrel as Goldman Sachs ended a recommendation to buy a basket of commodities including crude oil, copper, cotton and platinum, saying the risks outweigh any further potential gain. The basket of raw materials was first recommended by Currie on Dec. 1. It had gained 25 percent since then.
“The Goldman thing is probably one of the bigger factors,” said Kyle Cooper, director of research for IAF Advisors in Houston. “A whole lot of the market is still dictated by money flow. You’ve got a situation where Goldman decided to take profits.”
The so-called CCCP basket had a 40 percent weighting in oil, 20 percent in copper, 10 percent in soybeans, 10 percent cotton and 20 percent platinum.
Japanese Nuclear Crisis
Oil also fell today after Japan’s Nuclear and Industrial Safety Agency raised the severity rating of its nuclear crisis at the Fukushima Dai-Ichi station to the highest level, matching the severity of the 1986 Chernobyl disaster and boosting concern that the crisis will curb Japanese demand.
The accident at the plant followed a record earthquake and tsunami on March 11.
“No matter how much oil people think they’re going to export to Japan to make up for the nuclear loss, we’re going to see that economy take a turn for the worse,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “If Japan really starts to deteriorate, its biggest trade partner is China, and they’re going to feel it next.”
China is the second-biggest oil-consuming country.
Oil volume in electronic trading on the Nymex was 993,886 contracts as of 4:33 p.m. in New York. Volume totaled 747,902 contracts yesterday, 6.3 percent below the average of the past three months and the highest level since March 16. Open interest was 1.57 million contracts.
Source.
Tuesday, April 12, 2011
Oil prices up again, 12th time this year
MANILA, Philippines—Even before the promised fuel subsidy for public utility jeepneys and tricycles could be implemented, local oil companies have again raised the prices of gasoline and diesel by P1.50 to P1.75 a liter and kerosene by P1.40 a liter.
Chevron (formerly Caltex), Pilipinas Shell Petroleum Corp., Petron Corp. and Total Philippines enforced the price increases starting Tuesday, saying it reflected the rise in the global prices of petroleum products.
According to a report from the Department of Energy (DoE), the latest increase brought the price of diesel to P46.45 to P49 a liter, and the price of gasoline to P53.60 and P60.81 a liter—breaching record high levels in 2008.
This is the 12th time that local oil companies raised their prices since the beginning of 2011. The total increases now amount to P9.60 a liter for gasoline and P9.85 a liter for diesel; the total reductions remain marginal at P1.75 a liter for gasoline and 25 centavos for diesel.
Right to peaceful assembly
The militant transport group Pinagkaisang Samahan ng Tsuper at Operator Nationwide (Piston) said it would mount fresh protests, including transport strikes, in May if the government failed to address the spiraling costs of fuel.
Piston, which Tuesday picketed Shell’s headquarters in Makati City to protest the latest fuel price increases, also chided President Benigno Aquino III for his spokesperson Edwin Lacierda’s apparent threat against the group.
“Our sincere advice to the President is not to look at our actions as disruptions to the riding public,” Piston secretary general George San Mateo said in a statement, adding that the right of Filipinos to hold peaceful mass actions to “seek redress to grievances” was protected by the Constitution.
Lacierda had earlier warned Piston to ensure that its protest actions against fuel price increases would not “affect the riding public,” or it would have to “face the consequences.”
Wrong advice
In a statement, the militant Bagong Alyansang Makabayan (Bayan) pointed out that the latest price increases had wiped out the government’s planned fuel subsidy Pantawid Pasada even before it could be implemented.
It challenged the President to fire his economic managers for giving him “wrong advice.”
With the P1.50 per liter increase in the price of diesel, the daily fuel cost of jeepney drivers has again risen by P45 based on their average daily consumption of 30 liters, Bayan said. On the other hand, Pantawid Pasada will provide a monthly subsidy of only P35 a day, and will not even be available until next month, it said.
Under the fuel assistance program, jeepney drivers will be given smart cards worth P1,050 (P35 a day) which they can use to buy fuel or avail themselves of discounts on a staggered basis. The cards will be distributed starting May 2.
Tricycle drivers will receive P150 (P5 a day).
Bayan secretary general Renato Reyes noted that Mr. Aquino’s presidency was nearing its one-year mark. “But in terms of economic policies, we have not seen a substantial change from the anti-people and dole-out programs of the Arroyo administration,” he said.
Reyes said “a case in point” was the escalating oil prices and Mr. Aquino’s decision, “on the advice of his economic managers, to implement a Pantawid Pasada instead of addressing the more important issues of price deregulation, value-added tax (VAT) and profiteering of the oil firms.”
The Land Transportation Franchising and Regulatory Board (LTFRB) had also said public transport operators who would join strikes risked the cancellation of their franchises for failing to do their duty of providing mass transportation services to commuters.
But Piston’s San Mateo said that if the government failed to stop the fuel price hikes, the group would have no choice but to go on strike.
“We are not afraid of Malacañang’s threat because the Filipino people, including ordinary consumers and commuters, are on our side,” San Mateo said. “We will wait until May 1 for the government’s answer.”
He said Piston was preparing for a second round of nationwide protests that could include transport strikes in key areas including Metro Manila.
Echoing Bayan’s Reyes, San Mateo said the effect of Pantawid Pasada was wiped out by the latest rise in fuel prices even before the first peso was even handed out.
Bayan, along with other groups, had been campaigning for the scrapping of the Oil Deregulation Law so as to give the government teeth to curb spikes in fuel prices.
Various groups have since been lobbying for the removal of the 12-percent VAT on oil to immediately bring down pump prices by P7 per liter or more.
Reyes said Mr. Aquino’s economic managers preferred “dole-out measures” and “feared the loss of government revenues from the VAT.”
“If this is indeed a new government, then it should find ways to generate revenues without burdening the people. If it is serious and effective in fighting corruption and tax evasion, then there will be no need for the VAT on oil,” he said.
‘No overcharging’
Elsewhere, the Provincial Bus Operators Association of the Philippines denied reports that its member-companies were overcharging passengers in time for the summer season, when demand is highest.
The group said its member-companies were simply implementing fare rate adjustments approved by the LTFRB in 2008.
“Our member-companies have been operating without relief from government despite the recent fuel price surges and increases in labor and toll fee rates,” said the association president Alex Yague.
“Instead of imposing punitive measures on us, the government should instead appreciate the provincial bus operators’ consistent fulfillment of their public service function and their decision not to burden the riding public with what is justifiably a new fare rate hike increase,” he said.
Yague also said that the member-companies had voluntarily cut fares after operating costs stabilized in 2009, and that the fares they charged were lower than what were allowed under the May 2008 fare rates.
He said the fare reduction made in 2009 was done voluntarily because of the drop in fuel costs at the time.
“Instead of punishing us, the national government should come to our succor and review both the incentives and regulatory structure that govern the industry,” he said.
Oil prices have been rising unrelentingly, hitting another new two-and-a-half-year high last seen in September 2008, according to the DoE oil monitor report.
The DoE cited “a variety of potential reasons for the continued spike in oil … including another earthquake of 7.1-magnitude that occurred Thursday near the same location [as that on March 11] off the coast of Japan that supported the argument for even more use of traditional fuels for power.”
Source.
Chevron (formerly Caltex), Pilipinas Shell Petroleum Corp., Petron Corp. and Total Philippines enforced the price increases starting Tuesday, saying it reflected the rise in the global prices of petroleum products.
According to a report from the Department of Energy (DoE), the latest increase brought the price of diesel to P46.45 to P49 a liter, and the price of gasoline to P53.60 and P60.81 a liter—breaching record high levels in 2008.
This is the 12th time that local oil companies raised their prices since the beginning of 2011. The total increases now amount to P9.60 a liter for gasoline and P9.85 a liter for diesel; the total reductions remain marginal at P1.75 a liter for gasoline and 25 centavos for diesel.
Right to peaceful assembly
The militant transport group Pinagkaisang Samahan ng Tsuper at Operator Nationwide (Piston) said it would mount fresh protests, including transport strikes, in May if the government failed to address the spiraling costs of fuel.
Piston, which Tuesday picketed Shell’s headquarters in Makati City to protest the latest fuel price increases, also chided President Benigno Aquino III for his spokesperson Edwin Lacierda’s apparent threat against the group.
“Our sincere advice to the President is not to look at our actions as disruptions to the riding public,” Piston secretary general George San Mateo said in a statement, adding that the right of Filipinos to hold peaceful mass actions to “seek redress to grievances” was protected by the Constitution.
Lacierda had earlier warned Piston to ensure that its protest actions against fuel price increases would not “affect the riding public,” or it would have to “face the consequences.”
Wrong advice
In a statement, the militant Bagong Alyansang Makabayan (Bayan) pointed out that the latest price increases had wiped out the government’s planned fuel subsidy Pantawid Pasada even before it could be implemented.
It challenged the President to fire his economic managers for giving him “wrong advice.”
With the P1.50 per liter increase in the price of diesel, the daily fuel cost of jeepney drivers has again risen by P45 based on their average daily consumption of 30 liters, Bayan said. On the other hand, Pantawid Pasada will provide a monthly subsidy of only P35 a day, and will not even be available until next month, it said.
Under the fuel assistance program, jeepney drivers will be given smart cards worth P1,050 (P35 a day) which they can use to buy fuel or avail themselves of discounts on a staggered basis. The cards will be distributed starting May 2.
Tricycle drivers will receive P150 (P5 a day).
Bayan secretary general Renato Reyes noted that Mr. Aquino’s presidency was nearing its one-year mark. “But in terms of economic policies, we have not seen a substantial change from the anti-people and dole-out programs of the Arroyo administration,” he said.
Reyes said “a case in point” was the escalating oil prices and Mr. Aquino’s decision, “on the advice of his economic managers, to implement a Pantawid Pasada instead of addressing the more important issues of price deregulation, value-added tax (VAT) and profiteering of the oil firms.”
The Land Transportation Franchising and Regulatory Board (LTFRB) had also said public transport operators who would join strikes risked the cancellation of their franchises for failing to do their duty of providing mass transportation services to commuters.
But Piston’s San Mateo said that if the government failed to stop the fuel price hikes, the group would have no choice but to go on strike.
“We are not afraid of Malacañang’s threat because the Filipino people, including ordinary consumers and commuters, are on our side,” San Mateo said. “We will wait until May 1 for the government’s answer.”
He said Piston was preparing for a second round of nationwide protests that could include transport strikes in key areas including Metro Manila.
Echoing Bayan’s Reyes, San Mateo said the effect of Pantawid Pasada was wiped out by the latest rise in fuel prices even before the first peso was even handed out.
Bayan, along with other groups, had been campaigning for the scrapping of the Oil Deregulation Law so as to give the government teeth to curb spikes in fuel prices.
Various groups have since been lobbying for the removal of the 12-percent VAT on oil to immediately bring down pump prices by P7 per liter or more.
Reyes said Mr. Aquino’s economic managers preferred “dole-out measures” and “feared the loss of government revenues from the VAT.”
“If this is indeed a new government, then it should find ways to generate revenues without burdening the people. If it is serious and effective in fighting corruption and tax evasion, then there will be no need for the VAT on oil,” he said.
‘No overcharging’
Elsewhere, the Provincial Bus Operators Association of the Philippines denied reports that its member-companies were overcharging passengers in time for the summer season, when demand is highest.
The group said its member-companies were simply implementing fare rate adjustments approved by the LTFRB in 2008.
“Our member-companies have been operating without relief from government despite the recent fuel price surges and increases in labor and toll fee rates,” said the association president Alex Yague.
“Instead of imposing punitive measures on us, the government should instead appreciate the provincial bus operators’ consistent fulfillment of their public service function and their decision not to burden the riding public with what is justifiably a new fare rate hike increase,” he said.
Yague also said that the member-companies had voluntarily cut fares after operating costs stabilized in 2009, and that the fares they charged were lower than what were allowed under the May 2008 fare rates.
He said the fare reduction made in 2009 was done voluntarily because of the drop in fuel costs at the time.
“Instead of punishing us, the national government should come to our succor and review both the incentives and regulatory structure that govern the industry,” he said.
Oil prices have been rising unrelentingly, hitting another new two-and-a-half-year high last seen in September 2008, according to the DoE oil monitor report.
The DoE cited “a variety of potential reasons for the continued spike in oil … including another earthquake of 7.1-magnitude that occurred Thursday near the same location [as that on March 11] off the coast of Japan that supported the argument for even more use of traditional fuels for power.”
Source.
Thursday, April 7, 2011
US oil price tops key $110 barrier
US oil prices hit their highest level since September 2008 Thursday as the IMF warned that demand is outpacing the growth of global supplies.
The New York benchmark West Texas Intermediate crude for May delivery closed at $110.30 a barrel, up $1.47 from Wednesday, after hitting an intraday high of $110.44 a barrel.
In London, Brent North Sea crude for May delivery picked up 37 cents to $122.67, still below its Wednesday high of $123.37 -- its best level since early August 2008.
"$110 was a very important technical level," said oil analyst John Kilduff of Again Capital.
"That's the number we've all been watching, not because it is a round number."
"It was the big action in 2008, the level that prices took off to the $147 level. And after they fell from there, it proved to be some support."
Kilduff also pointed to the ongoing rebellion in Libya "grinding to a standstill" that suggested Libya's valued light crude would remain off the market for longer than originally anticipated.
On Wednesday a Greek-owned tanker carrying $100-million worth of crude left a terminal in rebel-held territory near Tobruk.
The cargo was the first consignment of oil to leave Libya since UN-backed air strikes began on March 19 against strongman Moammar Gadhafi's crackdown on the rebels.
But there was no sign how much that could be sustained.
Meanwhile the International Monetary Fund warned that oil supply growth was slowing while demand was accelerating, pointing to sustained higher prices over the long term.
"The persistent increase in oil prices over the past decade suggests that global oil markets have entered a period of increased scarcity," the IMF said in a report on the global economy.
"If the tension intensifies, whether from stronger demand, traditional supply disruptions, or setbacks to capacity growth, market clearing could force price spikes, as in 2007-2008."
"After stagnating in recent years, oil supply will not return to the growth trends of the 1980s and 1990s," Thomas Helbling, the report's lead author, told reporters.
Source.
The New York benchmark West Texas Intermediate crude for May delivery closed at $110.30 a barrel, up $1.47 from Wednesday, after hitting an intraday high of $110.44 a barrel.
In London, Brent North Sea crude for May delivery picked up 37 cents to $122.67, still below its Wednesday high of $123.37 -- its best level since early August 2008.
"$110 was a very important technical level," said oil analyst John Kilduff of Again Capital.
"That's the number we've all been watching, not because it is a round number."
"It was the big action in 2008, the level that prices took off to the $147 level. And after they fell from there, it proved to be some support."
Kilduff also pointed to the ongoing rebellion in Libya "grinding to a standstill" that suggested Libya's valued light crude would remain off the market for longer than originally anticipated.
On Wednesday a Greek-owned tanker carrying $100-million worth of crude left a terminal in rebel-held territory near Tobruk.
The cargo was the first consignment of oil to leave Libya since UN-backed air strikes began on March 19 against strongman Moammar Gadhafi's crackdown on the rebels.
But there was no sign how much that could be sustained.
Meanwhile the International Monetary Fund warned that oil supply growth was slowing while demand was accelerating, pointing to sustained higher prices over the long term.
"The persistent increase in oil prices over the past decade suggests that global oil markets have entered a period of increased scarcity," the IMF said in a report on the global economy.
"If the tension intensifies, whether from stronger demand, traditional supply disruptions, or setbacks to capacity growth, market clearing could force price spikes, as in 2007-2008."
"After stagnating in recent years, oil supply will not return to the growth trends of the 1980s and 1990s," Thomas Helbling, the report's lead author, told reporters.
Source.
Wednesday, April 6, 2011
China Raises Fuel Prices After Crude Advances to 30-Month High
China raised retail fuel prices for the second time this year after oil’s advance to a 30-month high undermined government efforts to cap costs and cool inflation in the world’s second-largest economy.
Prices will rise by as much as 5.8 percent today, with gasoline increasing by 500 yuan ($76) a metric ton and diesel by 400 yuan, the National Development and Reform Commission said in a statement yesterday.
Crude fell on concern higher prices will reduce demand in the world’s second-largest oil consumer, while shares of China’s biggest refiner gained. The fuel-price increase came two days after the Chinese central bank raised interest rates for the fourth time since October to tame inflation that exceeded the government’s target.
“China has reluctantly raised domestic gasoline and diesel prices to record highs,” said Gordon Kwan, head of regional energy search at Mirae Asset Securities in Hong Kong. “The move is like pulling teeth with the government amid the anti- inflation campaign.”
China last raised fuel tariffs by as much as 4.6 percent on Feb. 20, based on a mechanism introduced in December 2008 that allows adjustments when crude costs change more than 4 percent over 22 working days. Consumer prices rose at an annual 4.9 percent pace in February, surpassing the government’s target of 4 percent for 2011.
China Petroleum & Chemical Corp., the country’s largest refiner, gained 0.9 percent to HK$8.09 in Hong Kong trading at 11:11 a.m. local time. PetroChina Co. fell 0.5 percent to HK$12.16. The Hang Seng Index declined 0.1 percent.
‘Into a Corner’
Crude climbed to $108.83 a barrel in New York yesterday, the highest settlement since Sept. 22, 2008, on concerns that conflict in Africa and the Middle East may curtail supplies.
“As much as the government wants to not raise prices, events in the Middle East have forced China into a corner,” Ben Simpfendorfer, publisher of China Insider and former chief economist at Royal Bank of Scotland Group Plc, said by mobile phone. “It’s a minor setback” in the fight against inflation.
The benchmark retail price of gasoline will increase by 0.37 yuan a liter and that of diesel by 0.34 yuan, the NDRC said.
After the adjustment, gasoline in China will retail at $1.05 a liter on average, according to Bloomberg calculations based on prices set by the NDRC for the country’s provinces and regions. That compares with $2.17 a liter in the U.K. and 97 cents a liter in the U.S.
China will continue subsidizing industries including farming, fishing and public transport, the NDRC said yesterday.
“Global crude oil prices may remain high,” the country’s top economic planner said. “Adjusting fuel prices will help curb excessive use of oil and contribute to energy saving.”
Crude has advanced 29 percent in New York since Feb. 15, when unrest in North Africa and the Middle East spread to Libya, formerly Africa’s third-biggest oil producer. Futures fell 0.4 percent to $108.44 a barrel in electronic trading at 11:03 a.m. Singapore time.
Source.
Prices will rise by as much as 5.8 percent today, with gasoline increasing by 500 yuan ($76) a metric ton and diesel by 400 yuan, the National Development and Reform Commission said in a statement yesterday.
Crude fell on concern higher prices will reduce demand in the world’s second-largest oil consumer, while shares of China’s biggest refiner gained. The fuel-price increase came two days after the Chinese central bank raised interest rates for the fourth time since October to tame inflation that exceeded the government’s target.
“China has reluctantly raised domestic gasoline and diesel prices to record highs,” said Gordon Kwan, head of regional energy search at Mirae Asset Securities in Hong Kong. “The move is like pulling teeth with the government amid the anti- inflation campaign.”
China last raised fuel tariffs by as much as 4.6 percent on Feb. 20, based on a mechanism introduced in December 2008 that allows adjustments when crude costs change more than 4 percent over 22 working days. Consumer prices rose at an annual 4.9 percent pace in February, surpassing the government’s target of 4 percent for 2011.
China Petroleum & Chemical Corp., the country’s largest refiner, gained 0.9 percent to HK$8.09 in Hong Kong trading at 11:11 a.m. local time. PetroChina Co. fell 0.5 percent to HK$12.16. The Hang Seng Index declined 0.1 percent.
‘Into a Corner’
Crude climbed to $108.83 a barrel in New York yesterday, the highest settlement since Sept. 22, 2008, on concerns that conflict in Africa and the Middle East may curtail supplies.
“As much as the government wants to not raise prices, events in the Middle East have forced China into a corner,” Ben Simpfendorfer, publisher of China Insider and former chief economist at Royal Bank of Scotland Group Plc, said by mobile phone. “It’s a minor setback” in the fight against inflation.
The benchmark retail price of gasoline will increase by 0.37 yuan a liter and that of diesel by 0.34 yuan, the NDRC said.
After the adjustment, gasoline in China will retail at $1.05 a liter on average, according to Bloomberg calculations based on prices set by the NDRC for the country’s provinces and regions. That compares with $2.17 a liter in the U.K. and 97 cents a liter in the U.S.
China will continue subsidizing industries including farming, fishing and public transport, the NDRC said yesterday.
“Global crude oil prices may remain high,” the country’s top economic planner said. “Adjusting fuel prices will help curb excessive use of oil and contribute to energy saving.”
Crude has advanced 29 percent in New York since Feb. 15, when unrest in North Africa and the Middle East spread to Libya, formerly Africa’s third-biggest oil producer. Futures fell 0.4 percent to $108.44 a barrel in electronic trading at 11:03 a.m. Singapore time.
Source.
Monday, April 4, 2011
Brent oil tops $120 a barrel on Libya unrest
NEW YORK—Oil prices surged to new heights Monday, with Brent crude topping $120 a barrel for the first time since August 22, 2008, as traders eyed a raging rebellion in oil-exporter Libya.
New York's main contract, light sweet crude for delivery in May, closed at $108.47 a barrel, a gain of 53 cents from Friday.
In London, Brent North Sea crude for May delivery leaped $2.36 to settle at $121.06, after topping at $121.29 just before the session close.
The market kept a focus on fighting that continued Monday in Libya between rebels and forces loyal to leader Moammar Gadhafi.
Rebel fighters made a new attempt to recapture Brega, advancing to the outskirts of the oil refinery town only to be forced back under artillery fire.
Before the crisis, Libya exported 1.3 million barrels a day of crude oil, more than 1.5 percent of global demand, in large part to Europe. Those exports have dwindled to a trickle amid the uprising.
That makes Brent crude futures, the European benchmark contract, more sensitive to the situation in Libya than the US market, where crude oil reserves are abundant.
"The longer these battles are going on, the more the market is realizing the supply is going to be offline," said Matt Smith of Summit Energy.
Unrest in other parts of the Arab world also contributed to the rise in oil prices, he said.
"Yemen is such a big threat at the moment because of the proximity" with Saudi Arabia, the biggest oil producer in the OPEC cartel, he said.
"Things in Bahrain have calmed down a little bit but any further unrest could press prices higher."
In Gabon, sub-Saharan Africa's fourth-largest oil producer, a strike by oil-sector employees had halted almost all oil production.
Gabon's oil daily output normally ranges from 220,000 to 240,000 barrels.
"It is not a lot of oil but given the current situation we can't afford any more outages, so all the barrels are important," Kilduff said.
Source.
New York's main contract, light sweet crude for delivery in May, closed at $108.47 a barrel, a gain of 53 cents from Friday.
In London, Brent North Sea crude for May delivery leaped $2.36 to settle at $121.06, after topping at $121.29 just before the session close.
The market kept a focus on fighting that continued Monday in Libya between rebels and forces loyal to leader Moammar Gadhafi.
Rebel fighters made a new attempt to recapture Brega, advancing to the outskirts of the oil refinery town only to be forced back under artillery fire.
Before the crisis, Libya exported 1.3 million barrels a day of crude oil, more than 1.5 percent of global demand, in large part to Europe. Those exports have dwindled to a trickle amid the uprising.
That makes Brent crude futures, the European benchmark contract, more sensitive to the situation in Libya than the US market, where crude oil reserves are abundant.
"The longer these battles are going on, the more the market is realizing the supply is going to be offline," said Matt Smith of Summit Energy.
Unrest in other parts of the Arab world also contributed to the rise in oil prices, he said.
"Yemen is such a big threat at the moment because of the proximity" with Saudi Arabia, the biggest oil producer in the OPEC cartel, he said.
"Things in Bahrain have calmed down a little bit but any further unrest could press prices higher."
In Gabon, sub-Saharan Africa's fourth-largest oil producer, a strike by oil-sector employees had halted almost all oil production.
Gabon's oil daily output normally ranges from 220,000 to 240,000 barrels.
"It is not a lot of oil but given the current situation we can't afford any more outages, so all the barrels are important," Kilduff said.
Source.
The good oil on Bakken barrels
It'S 60 years today since oil was discovered south of Tioga (present population: 1127) in North Dakota.
So what, we hear you cry.
Well, that hole drilled by Amerada Petroleum of Tulsa, Oklahoma, led to the discovery of the Williston Basin and the much bigger hydrocarbon province now known as the Bakken formation lying under North Dakota and Montana, which was estimated by the US Geological Survey in 2008 to contain 4.3 billion barrels of what it called "technically recoverable oil".
Despite the discovery on April 4, 1951, the Bakken was not a big drawcard. There was seen to be plenty of oil elsewhere and more easily recovered than crude trapped in shale, and the big falls in oil prices made the technology cost too great.
But now it is changing. Oil production in the Bakken went from 3000 barrels a day in 2005 to 225,000 last year and some say it will be yielding 1 million barrels a day by 2020.
And we are never going to see oil at $US10 a barrel as we did in the 1990s. Light crude closed in New York on Friday at $US108.31.
Hartley oil analyst Dave Wall has a "buy" on Samson Oil & Gas (SSN), which has a play in the Bakken and in the Williston Basin in particular. It's not a big call, with a three-month price target of 21c, against Friday's close at 18c.
Samson has a maximum flow rate of 1320 barrels a day from the Bakken with its Rodney 1-14 well in North Dakota.
Work has not finished, though, and 15 plugs in the well, which effectively choke back the potential flow of the well, are expected to be drilled out this week. We should get a more reliable oil flow figure after that.
Today the company will start fracture stimulation (which involves injecting water, sand and chemicals to release trapped oil and gas) at its nearby Earl 1-13H well.
Wall says 30 recent wells by various companies into the shale have achieved average daily production of 678 barrels each and that, if Samson could emulate those results, he calculates an upside potential of 36c for the share price.
Overall, though, the record of Australian juniors looking for oil and gas in the US has, with some exceptions, been fairly dismal to judge by present share prices.
Among the latest news, Entek Energy (ETE) - Friday close at 13c - had added to its Gulf of Mexico acreage. The junior has also teamed up with Emerald Oil & Gas (EMR) - Friday close at 4.5c - to explore ground in the Green River Basin, a huge shale formation that extends through Wyoming, Utah and Colorado.
Grand Gulf Energy (GGE) - Friday close at 0.6c and a day-traders' delight - has papered the walls with another 364 million shares issued at 0.5c to raise about $1.8 million.
This junior owns a stake in Louisiana's Napoleonville salt dome project which, the company says, has the potential to contain 520 billion cubic feet of gas and 4.5 million barrels of oil.
Pure Speculation reported on the acquisition in mid-2007. As the story still seems to be all about potential rather than reserves, we'll check back in 2015.
A little more advanced is Sundance Energy (SEA) - Friday close at 94c - which has interests in five US states, including four Bakken plays in the Williston Basin. The company has just announced a 202 per cent increase in its 2P (proved plus probable) reserves and will have a 3P (proved, probable and possible) reserve estimate in September.
Kyrgyzstan or bust
NOTHING quite like laying off a bit of your political risk weighting.
Kentor Gold (KGL) has had its ups and downs depending on the situation in Kyrgyzstan but seems on track there for its Andash project to produce 70,000 ounces of gold and 7400 tonnes of copper a year.
Obviously, Macquarie Bank thinks so, having last month lent Kentor $US50m. And the new government in Bishkek seems to be holding together, although cosying up to Moscow for support.
But the company, with access to $71m in the bank, has the ability to shell out $12.8m in cash to take over an unlisted public company and pay off its debt.
Jinka Minerals has the appealing factor of owning three projects, all of them reassuringly in Australia - the Burnakura gold project 50km south of Meekatharra, the nearby Gabanintha copper-gold deposit and the Jervois base metals project near Alice Springs.
Jinka has 1400 shareholders. You would have thought that such a company would have floated, but the main barrier to that has been the $4.9m Jinka owes MD Michael Ruane, who parted with the readies needed to buy Burnakura.
The debt is perfectly justifiable - directors from time to time lend their companies money - but it is hard to sell an IPO when a chunk of the proceeds will be used to pay debt, no matter that it may have been money well spent.
Meanwhile, Kentor has begun talking to the locals in Kyrgyzstan. Most of the people are on board, the main opposition coming from the wealthiest families in the area.
They are opposed to the mine because they fear it will deprive them of cheap farm labour.
The workers tending crops and herds get paid between $60 and $80 a month, while Kentor is planning to offer about $450 a month.
Kentor is trying to get the top landowners onside by offering contracts for them to supply the mining village with meat and build fences and pipelines.
Milestone at Dragon
SO many ASX announcements get scant attention except from the more enthusiastic shareholders, but we like to notice milestones when possible.
We didn't have space for the news several weeks ago from Dragon Mining (DRA) reaching a gold inventory of 1 million ounces, but the latest drilling result allows us to make amends.
The 1.12 million ounce resource was due mainly to the upgrade of resource at the Kuusamo project in Finland, where there is 383,500oz at an average 5.4 grams/tonne.
During the week, the company announced a very good result there, with the top half of a hole returning 34.9m at 9.3 grams/tonne.
There's 583,200oz at 5.7g/t at Vammala, also in Finland, and 158,200oz at the Svartliden gold mine in Sweden.
These figures are after depletion has been subtracted, these two operations producing 14,940oz between them in the December quarter.
Speewah ambitions
ONE to keep an eye on is Speewah Metals (SPM), which has an ambitious exploration program for this year.
That program, unveiled on Friday, is to target another two to five billion tonnes of ore at its vanadium-titanium project in the East Kimberley region.
The company says it has Australia's largest vanadium in magnetite deposit, with a resource of 3.16 billion tonnes at 0.3 per cent.
Speewah is doing metallurgical tests and other groundwork before either raising money for a bankable feasibility study and development or sale of the project.
Source
So what, we hear you cry.
Well, that hole drilled by Amerada Petroleum of Tulsa, Oklahoma, led to the discovery of the Williston Basin and the much bigger hydrocarbon province now known as the Bakken formation lying under North Dakota and Montana, which was estimated by the US Geological Survey in 2008 to contain 4.3 billion barrels of what it called "technically recoverable oil".
Despite the discovery on April 4, 1951, the Bakken was not a big drawcard. There was seen to be plenty of oil elsewhere and more easily recovered than crude trapped in shale, and the big falls in oil prices made the technology cost too great.
But now it is changing. Oil production in the Bakken went from 3000 barrels a day in 2005 to 225,000 last year and some say it will be yielding 1 million barrels a day by 2020.
And we are never going to see oil at $US10 a barrel as we did in the 1990s. Light crude closed in New York on Friday at $US108.31.
Hartley oil analyst Dave Wall has a "buy" on Samson Oil & Gas (SSN), which has a play in the Bakken and in the Williston Basin in particular. It's not a big call, with a three-month price target of 21c, against Friday's close at 18c.
Samson has a maximum flow rate of 1320 barrels a day from the Bakken with its Rodney 1-14 well in North Dakota.
Work has not finished, though, and 15 plugs in the well, which effectively choke back the potential flow of the well, are expected to be drilled out this week. We should get a more reliable oil flow figure after that.
Today the company will start fracture stimulation (which involves injecting water, sand and chemicals to release trapped oil and gas) at its nearby Earl 1-13H well.
Wall says 30 recent wells by various companies into the shale have achieved average daily production of 678 barrels each and that, if Samson could emulate those results, he calculates an upside potential of 36c for the share price.
Overall, though, the record of Australian juniors looking for oil and gas in the US has, with some exceptions, been fairly dismal to judge by present share prices.
Among the latest news, Entek Energy (ETE) - Friday close at 13c - had added to its Gulf of Mexico acreage. The junior has also teamed up with Emerald Oil & Gas (EMR) - Friday close at 4.5c - to explore ground in the Green River Basin, a huge shale formation that extends through Wyoming, Utah and Colorado.
Grand Gulf Energy (GGE) - Friday close at 0.6c and a day-traders' delight - has papered the walls with another 364 million shares issued at 0.5c to raise about $1.8 million.
This junior owns a stake in Louisiana's Napoleonville salt dome project which, the company says, has the potential to contain 520 billion cubic feet of gas and 4.5 million barrels of oil.
Pure Speculation reported on the acquisition in mid-2007. As the story still seems to be all about potential rather than reserves, we'll check back in 2015.
A little more advanced is Sundance Energy (SEA) - Friday close at 94c - which has interests in five US states, including four Bakken plays in the Williston Basin. The company has just announced a 202 per cent increase in its 2P (proved plus probable) reserves and will have a 3P (proved, probable and possible) reserve estimate in September.
Kyrgyzstan or bust
NOTHING quite like laying off a bit of your political risk weighting.
Kentor Gold (KGL) has had its ups and downs depending on the situation in Kyrgyzstan but seems on track there for its Andash project to produce 70,000 ounces of gold and 7400 tonnes of copper a year.
Obviously, Macquarie Bank thinks so, having last month lent Kentor $US50m. And the new government in Bishkek seems to be holding together, although cosying up to Moscow for support.
But the company, with access to $71m in the bank, has the ability to shell out $12.8m in cash to take over an unlisted public company and pay off its debt.
Jinka Minerals has the appealing factor of owning three projects, all of them reassuringly in Australia - the Burnakura gold project 50km south of Meekatharra, the nearby Gabanintha copper-gold deposit and the Jervois base metals project near Alice Springs.
Jinka has 1400 shareholders. You would have thought that such a company would have floated, but the main barrier to that has been the $4.9m Jinka owes MD Michael Ruane, who parted with the readies needed to buy Burnakura.
The debt is perfectly justifiable - directors from time to time lend their companies money - but it is hard to sell an IPO when a chunk of the proceeds will be used to pay debt, no matter that it may have been money well spent.
Meanwhile, Kentor has begun talking to the locals in Kyrgyzstan. Most of the people are on board, the main opposition coming from the wealthiest families in the area.
They are opposed to the mine because they fear it will deprive them of cheap farm labour.
The workers tending crops and herds get paid between $60 and $80 a month, while Kentor is planning to offer about $450 a month.
Kentor is trying to get the top landowners onside by offering contracts for them to supply the mining village with meat and build fences and pipelines.
Milestone at Dragon
SO many ASX announcements get scant attention except from the more enthusiastic shareholders, but we like to notice milestones when possible.
We didn't have space for the news several weeks ago from Dragon Mining (DRA) reaching a gold inventory of 1 million ounces, but the latest drilling result allows us to make amends.
The 1.12 million ounce resource was due mainly to the upgrade of resource at the Kuusamo project in Finland, where there is 383,500oz at an average 5.4 grams/tonne.
During the week, the company announced a very good result there, with the top half of a hole returning 34.9m at 9.3 grams/tonne.
There's 583,200oz at 5.7g/t at Vammala, also in Finland, and 158,200oz at the Svartliden gold mine in Sweden.
These figures are after depletion has been subtracted, these two operations producing 14,940oz between them in the December quarter.
Speewah ambitions
ONE to keep an eye on is Speewah Metals (SPM), which has an ambitious exploration program for this year.
That program, unveiled on Friday, is to target another two to five billion tonnes of ore at its vanadium-titanium project in the East Kimberley region.
The company says it has Australia's largest vanadium in magnetite deposit, with a resource of 3.16 billion tonnes at 0.3 per cent.
Speewah is doing metallurgical tests and other groundwork before either raising money for a bankable feasibility study and development or sale of the project.
Source
Thursday, March 31, 2011
Yuan Set for Weekly Gain on Oil Price Rise, Manufacturing Health
China’s yuan was poised for a third weekly gain as oil prices surged and a report signaled exporters are withstanding the currency’s appreciation.
Crude prices in New York surged to $107.65 a barrel, adding to pressure on authorities to seek a stronger yuan to reduce import costs. Manufacturing growth accelerated for the first time in four months, easing concern that monetary tightening may lead to a sharp slowdown in the world’s second-biggest economy. China’s central bank set the reference rate 0.06 percent higher at 6.5527, the strongest level since July 2005.
“The move reflects continued need to fight imported inflation via currency appreciation as oil prices continue to climb,” said Dariusz Kowalczyk, a Hong Kong-based senior economist at Credit Agricole CIB. “China remains in a tightening mode and will use a variety of tools, including stronger currency, to bring price pressures under control.” Kowalczyk forecast the yuan to reach 6.3 per dollar by the end of this year.
The yuan gained 0.16 percent this week and rose 0.02 percent today to 6.5472 per dollar as of 10:00 a.m. in Shanghai, according to the China Foreign Exchange Trade System. The currency touched 6.546 today, the strongest level since the country unified official and market exchange rates at the end of 1993. In Hong Kong’s offshore market, the currency fell 0.02 percent to 6.5485.
Twelve-month non-deliverable forwards were little changed at 6.419 per dollar in Hong Kong, reflecting bets the currency will strengthen 2 percent from the onshore spot rate in a year, according to data compiled by Bloomberg. Group of 20 finance chiefs meeting in China yesterday held out the prospect of an enlarged global role for the yuan to encourage the government to free up a currency described by the U.S. as “substantially undervalued.”
Manufacturing Strength
The Purchasing Managers’ Index rose to 53.4 in March from 52.2 in February, the China Federation of Logistics and Purchasing said in a statement on its website today. The reading compared with the median forecast of 54 in a Bloomberg News survey of 17 economists.
Premier Wen Jiabao is seeking to restrain surging prices for homes and consumer goods while sustaining economic growth to create jobs. Inflation topped the government’s target in the first two months of this year and officials will boost interest rates again this quarter, according to all 20 economists in a Bloomberg News survey.
Source
Crude prices in New York surged to $107.65 a barrel, adding to pressure on authorities to seek a stronger yuan to reduce import costs. Manufacturing growth accelerated for the first time in four months, easing concern that monetary tightening may lead to a sharp slowdown in the world’s second-biggest economy. China’s central bank set the reference rate 0.06 percent higher at 6.5527, the strongest level since July 2005.
“The move reflects continued need to fight imported inflation via currency appreciation as oil prices continue to climb,” said Dariusz Kowalczyk, a Hong Kong-based senior economist at Credit Agricole CIB. “China remains in a tightening mode and will use a variety of tools, including stronger currency, to bring price pressures under control.” Kowalczyk forecast the yuan to reach 6.3 per dollar by the end of this year.
The yuan gained 0.16 percent this week and rose 0.02 percent today to 6.5472 per dollar as of 10:00 a.m. in Shanghai, according to the China Foreign Exchange Trade System. The currency touched 6.546 today, the strongest level since the country unified official and market exchange rates at the end of 1993. In Hong Kong’s offshore market, the currency fell 0.02 percent to 6.5485.
Twelve-month non-deliverable forwards were little changed at 6.419 per dollar in Hong Kong, reflecting bets the currency will strengthen 2 percent from the onshore spot rate in a year, according to data compiled by Bloomberg. Group of 20 finance chiefs meeting in China yesterday held out the prospect of an enlarged global role for the yuan to encourage the government to free up a currency described by the U.S. as “substantially undervalued.”
Manufacturing Strength
The Purchasing Managers’ Index rose to 53.4 in March from 52.2 in February, the China Federation of Logistics and Purchasing said in a statement on its website today. The reading compared with the median forecast of 54 in a Bloomberg News survey of 17 economists.
Premier Wen Jiabao is seeking to restrain surging prices for homes and consumer goods while sustaining economic growth to create jobs. Inflation topped the government’s target in the first two months of this year and officials will boost interest rates again this quarter, according to all 20 economists in a Bloomberg News survey.
Source
Tuesday, March 29, 2011
Crude Oil Trades Near One-Week Low in New York as Libyan Rebels Make Gains
Crude oil dropped to the lowest price in a week in New York as the advance of Libyan rebels against Muammar Qaddafi’s troops spurred hope that the conflict in Africa’s third-largest oil producer may end soon.
Futures fell as much as 1.2 percent after Libyan government troops prepared to block advancing rebels at Sirte, Qaddafi’s hometown. Crude extended losses after St. Louis Federal Reserve President James Bullard indicated that the Fed may tighten monetary policy soon, fanning speculation demand growth may falter in the U.S., the world’s biggest oil consumer.
“The fairly disappointing news hurt market sentiment for risk appetite and pushed crude oil prices lower,” said Myrto Sokou, a London-based research analyst at Sucden Financial Ltd.
Crude for May delivery on the New York Mercantile Exchange fell as much as $1.28 to $102.70 a barrel, the lowest price since March 22, and was at $103.28 at 1:34 p.m. London time. Brent crude for May settlement on the London-based ICE Futures Europe exchange was down 59 cents at $114.21 a barrel.
President Barack Obama yesterday defended his decision to involve U.S. forces in the war. Military intervention “stopped Qaddafi’s deadly advance” and helped prevent a massacre of civilians that would have “stained the conscience of the world,” Obama said in a speech at the National Defense University in Washington late yesterday.
U.S. Monetary Policy
The U.S. Federal Reserve may need to decide on when to tighten monetary policy before the outlook for the global economy clears up later this year, Bullard said today in Prague.
A reduction in the Fed’s asset-purchase, or “quantitative easing,” program may begin if the U.S. economy is strong and global uncertainties are resolved, he said. A cut in the $600 billion program could be “on the order of $100 billion,” Bullard told reporters today following a presentation at a banking conference in Prague.
The volume of futures contracts trading on the New York Mercantile Exchange declined to 433,173 on March 25, the lowest since Dec. 31, according to data compiled by Bloomberg. Oil rose 4.3 percent last week to $105.40 a barrel.
“As governments around the world continued to take actions in response to the recent events, the oil market took a wait- and-see approach,” David Greely and Jeffrey Currie, analysts at Goldman Sachs, said in a report dated yesterday.
Hedge Fund Positions
Lower trading volumes are accompanied by high speculative net-long positions. Hedge-fund managers and other large speculators, betting that prices will rise, increased their net- long positions in futures by 5.9 percent to 286,812 futures in the seven days ended March 22, according to Commodity Futures Trading Commission data.
“We are in a situation where the speculative long positions are at very high levels but market liquidity at very low levels. This makes for a clear liquidity risk,” Olivier Jakob, managing director of Geneva-based consultants Petro matrix, said in a research note.
Futures in New York have rallied 22 percent since anti- government protests began Feb. 15 in Libya. The market may see little room for further gains in the near future, according to Glen Ward, head of retail derivatives of London Capital Group.
“All these long positions have to be got out of at some stage, so it’s time for the market to have a correction,” Ward said. “What you have seen is basically profit-taking.”
Stockpiles of crude in the U.S., the world’s biggest oil consumer, probably gained for a fourth week as imports rose ahead of the peak gasoline demand season, a Bloomberg News survey showed. The Energy Department publishes its weekly inventory report tomorrow. The industry-funded American Petroleum Institute releases its supply data today.
Commercially held inventories climbed 2 million barrels in the week ended March 25, according to the median estimate of nine analysts surveyed. Supplies previously increased to 352.8 million, the highest since December, as imports reached a six- week high.
Source
Futures fell as much as 1.2 percent after Libyan government troops prepared to block advancing rebels at Sirte, Qaddafi’s hometown. Crude extended losses after St. Louis Federal Reserve President James Bullard indicated that the Fed may tighten monetary policy soon, fanning speculation demand growth may falter in the U.S., the world’s biggest oil consumer.
“The fairly disappointing news hurt market sentiment for risk appetite and pushed crude oil prices lower,” said Myrto Sokou, a London-based research analyst at Sucden Financial Ltd.
Crude for May delivery on the New York Mercantile Exchange fell as much as $1.28 to $102.70 a barrel, the lowest price since March 22, and was at $103.28 at 1:34 p.m. London time. Brent crude for May settlement on the London-based ICE Futures Europe exchange was down 59 cents at $114.21 a barrel.
President Barack Obama yesterday defended his decision to involve U.S. forces in the war. Military intervention “stopped Qaddafi’s deadly advance” and helped prevent a massacre of civilians that would have “stained the conscience of the world,” Obama said in a speech at the National Defense University in Washington late yesterday.
U.S. Monetary Policy
The U.S. Federal Reserve may need to decide on when to tighten monetary policy before the outlook for the global economy clears up later this year, Bullard said today in Prague.
A reduction in the Fed’s asset-purchase, or “quantitative easing,” program may begin if the U.S. economy is strong and global uncertainties are resolved, he said. A cut in the $600 billion program could be “on the order of $100 billion,” Bullard told reporters today following a presentation at a banking conference in Prague.
The volume of futures contracts trading on the New York Mercantile Exchange declined to 433,173 on March 25, the lowest since Dec. 31, according to data compiled by Bloomberg. Oil rose 4.3 percent last week to $105.40 a barrel.
“As governments around the world continued to take actions in response to the recent events, the oil market took a wait- and-see approach,” David Greely and Jeffrey Currie, analysts at Goldman Sachs, said in a report dated yesterday.
Hedge Fund Positions
Lower trading volumes are accompanied by high speculative net-long positions. Hedge-fund managers and other large speculators, betting that prices will rise, increased their net- long positions in futures by 5.9 percent to 286,812 futures in the seven days ended March 22, according to Commodity Futures Trading Commission data.
“We are in a situation where the speculative long positions are at very high levels but market liquidity at very low levels. This makes for a clear liquidity risk,” Olivier Jakob, managing director of Geneva-based consultants Petro matrix, said in a research note.
Futures in New York have rallied 22 percent since anti- government protests began Feb. 15 in Libya. The market may see little room for further gains in the near future, according to Glen Ward, head of retail derivatives of London Capital Group.
“All these long positions have to be got out of at some stage, so it’s time for the market to have a correction,” Ward said. “What you have seen is basically profit-taking.”
Stockpiles of crude in the U.S., the world’s biggest oil consumer, probably gained for a fourth week as imports rose ahead of the peak gasoline demand season, a Bloomberg News survey showed. The Energy Department publishes its weekly inventory report tomorrow. The industry-funded American Petroleum Institute releases its supply data today.
Commercially held inventories climbed 2 million barrels in the week ended March 25, according to the median estimate of nine analysts surveyed. Supplies previously increased to 352.8 million, the highest since December, as imports reached a six- week high.
Source
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