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.
Friday, May 27, 2011
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.
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