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.
Showing posts with label brend crude oil. Show all posts
Showing posts with label brend crude oil. Show all posts
Thursday, August 11, 2011
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.
Subscribe to:
Posts (Atom)
