Thursday, 30 June 2011
Oil Drops, Extending Quarterly Loss, as U.S. Demand Falters
Oil dropped, extending its first quarterly loss in a year, amid signs of faltering fuel demand in the U.S., the world’s biggest crude consumer.
Futures in New York dropped as much as 0.7 percent, halting the biggest two-day rally in seven weeks. The U.S. Energy Department said yesterday gasoline demand dropped for a second week in the seven days to June 24. U.S. pump prices are up 29 percent from a year earlier.
“The situation with very high gasoline prices isn’t sustainable,”Christophe Barret, a London-based oil analyst at Credit Agricole SA, said by phone. “The Energy Department figures weren’t that supportive.”
Crude for August delivery fell as much as 62 cents to $94.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.57 as of 9:57 a.m. London time. The contract climbed yesterday $1.88 to $94.77, completing a two-day gain of 4.6 percent, the most since May 10. Futures are down 11 percent this quarter.
Brent oil for August settlement was down $1.10 a barrel at $111.30. The European benchmark, down 5.2 percent in the second quarter, traded at a premium of $16.83 to New York-traded West Texas Intermediate. The spread reached a record $22.29 a barrel on June 15.
Crude oil steady near $95
NEW YORK, June 30 (UPI) -- Crude oil prices were steady in New York overnight holding close to $95 per barrel with help from a rebound in equities.
The Dow Jones industrial average closed higher Wednesday for the third consecutive trading session. Markets in Asia and Europe headed higher Thursday.
Oil prices jumped 2 percent in the previous session as the Energy Information Administration reported U.S. oil inventories dropped by 4.4 million barrels to 359.5 million barrels in the week ending June 24.
The drop exceeded expectations and the market remained bullish overnight.
Thursday morning, the price of West Texas Intermediate crude for August delivery on the New York Mercantile Exchange reached $94.84 per barrel after hitting an overnight high of $95.44.
Earlier in the week, prices were at a four-month low below $90 per barrel.
Home heating oil prices added 0.52 cents Thursday to $2.9399 per gallon. Reformulated gasoline prices gained 0.47 cents to $2.9396 per gallon.
Henry Hub natural gas prices lost 8.6 cents to $4.229 per million British thermal units.
At the pump, the national average price of unleaded gasoline lost 0.2 cents Thursday to reach $3.541 per gallon, AAA said.
Crude oil dips on speculation IEA to release more supply
Forexpros - Crude oil futures dipped on Thursday, declining for the first time in three days amid speculation the International Energy Agency planned to release more oil from strategic reserves, while a weaker U.S. dollar capped losses.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD94.53 a barrel during European morning trade, shedding 0.6%.
It earlier fell as much as 0.72% to hit a daily low of USD94.41 a barrel.
IEA Deputy Executive Director Richard Jones said at an industry conference in Mexico City on Wednesday that the agency may decide to release additional oil stockpiles by mid-July to offset a drop in global supplies due to the ongoing conflict in Libya.
"It will be up to our member countries, they could decide to continue it for a month or two," Mr. Jones said, while adding that a decision on whether to extend the release could be made "around the third week of July".
Crude prices have erased the sharp losses suffered in the wake of last Thursday's IEA announcement that it would release of 60 million barrels of oil from emergency reserves.
Meanwhile, a weaker dollar supported prices. The dollar index, which measures the greenback against a basket of major currencies, was down 0.4% to trade at 74.71, hovering close to a three-week low.
On Wednesday, crude prices jumped to a one-week high as risk aversion eased after Greece's parliament approved a critical austerity plan deemed necessary to avoid a sovereign debt default.
Also Wednesday, official data showed that U.S. crude oil inventories declined by 4.4 million barrels last week, nearly tripling expectations for a 1.5 million barrel decline.
Total motor gasoline inventories unexpectedly declined by 1.4 million barrels, confounding expectations for a 0.8 million barrel increase.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery slumped 0.75% to trade at USD111.65 a barrel, up USD17.12 on its U.S. counterpart.
Read more: http://community.nasdaq.com/News/2011-06/crude-oil-dips-on-speculation-iea-to-release-more-supply.aspx?storyid=83220#ixzz1QnaW4CjY
Monday, 30 May 2011
Crude Oil Likely to Decline While Gold Gains on Soft US Economic Data
Crude Oil Consolidation to Yield to Renewed Selling
WTI Crude Oil (NY Close): $100.59 // +0.36 // +0.36%
Prices continue to consolidate below the 38.2% Fibonacci retracement of the drop from the May 2nd high at $102.35. A break above this boundary exposes the 50% level at $104.73. Broadly speaking, anything shy of that keeps the overall structure broadly bearish. Near-term support stands at the psychologically significant $100 figure, followed by the 5/6 low at $94.65.
A quiet session is ahead, with futures markets closing early in the US for the Memorial Day holiday. Prices came under pressure overnight, which newswires chalked up to positioning ahead of this week's packed US economic calendar that threatens to show the world's top economy is meeting with strong headwinds. Most critically, separate reports are expected to show that growth in the US manufacturing sector slowed for the third consecutive month in May to the weakest pace since October 2010 while the economy added just 185,000 jobs, the least since January.
Indeed, a Citigroup index tracking positive US economic surprises suggests the trend in data releases has been pointing to steadily deterioration. The rapid approach of the expiration of QE2 - set to conclude with the Fed's final bonds purchase on June 9 - ought to compound downward pressure. As we have suggested repeatedly over recent weeks, the program's end is likely to precede a rise in US borrowing costs through the second half of the year, which is likely to unleash a short-term unwinding of bets on a range of risky assets (including crude) as well as long-term downward pressure on economic growth when it is already clearly fragile.
Gold to Extend Rebound Amid Risk Aversion
Spot Gold (NY Close): $1536.40 // +17.25 // +1.14%
Prices have taken out resistance at $1533.12, the 61.8% Fibonacci retracement of the drop from the May 2 high, clearing the way for an advance to the 76.4% level at $1549.91. The 61.8% Fib has been recast as near-term support, with a break back below that targeting the 50% retracement at $1519.55.
Gold's recently rediscovered role as a safe haven asset may allow the metal to rise this week if the pessimism felt overnight about the upcoming set of US economic releases persists upon the return of liquidity to the markets following the Memorial Day holiday. The reemergence of Euro Zone sovereign risk fears over the weekend further bolster the case for short-term gains. Greek CDS rates hit the highest in a week overnight after Der Spiegel reported the country would not meet any of the fiscal goals set out in the terms of the EU/IMF bailout deal.
Spot Silver (NY Close): $37.99 // +0.69 // +1.86%
Prices are wedged between $36.44 and $38.99, the 23.6% and 38.2% Fibonacci retracements of the 4/25-5/6 decline, respectively. The correlation between gold and silver remains iron-clad, hinting the cheaper metal is likely to follow its more expensive counterpart higher if risk aversion grips financial markets anew. As we have noted previously, a significant inverse correlation between the gold/silver ratio and the S&P 500 hints the yellow metal will outperform if a flight to safety materializes.
Oil Drops on Speculation Fuel Demand May Falter as U.S. Economy Weakens
Oil dropped in New York, headed for its first monthly decline since August, on speculation fuel demand may falter amid a slowdown in the U.S. economic recovery and Europe’s continuing debt crisis.
Futures slipped as much as 1 percent before reports this week that may show U.S. employers hired fewer workers in May and manufacturing cooled. Oil also dropped as concern that European governments will struggle to resolve the region’s debt crises weakened the euro against the dollar, reducing the appeal of commodities priced in the U.S. currency. Trading volumes were lower than average, with public holidays in the U.S. and U.K.
“The dollar is a bit stronger today, which is a negative factor for prices,” said Carsten Fritsch, a Commerzbank AG analyst in Frankfurt. Greek debt problems “weigh on the euro.”
Crude for July delivery fell as much as 99 cents to $99.60 in electronic trading on the New York Mercantile Exchange and was at $100.12 at 1:42 p.m. London time. Prices have fallen 12 percent this month. Brent oil for July settlement lost 35 cents, or 0.3 percent, to $114.68 on the ICE Futures Europe exchange in London. The contract has fallen 8.9 percent this month.
U.S. floor trading is closed today for the Memorial Day holiday and electronic trades will be booked with tomorrow’s transactions for settlement purposes.
The European benchmark contract traded at a premium of $14.56 a barrel to U.S. futures. 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.
U.S. Economy
The dollar gained 0.3 percent to trade at $1.4277 against the euro after Greek Prime MinisterGeorge Papandreou said he’ll press ahead with new austerity measures even as he failed to win backing from opposition parties. A strengthening dollar limits the appeal of commodities priced in the currency as a hedge against inflation.
U.S. manufacturing, which accounts for about 12 percent of the world’s biggest economy, will probably cool following its strongest showing in seven years. The Institute for Supply Management’s factory index fell to 57.6 this month, the lowest level since October, according median forecast in the Bloomberg survey of economists. The Labor Department may say on June 3 payrolls rose 185,000 after a 244,000 gain in April, according to a separate survey.
Employment Data
“The employment data will be the key this week to really see what’s happening” in the U.S., saidJonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year.
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, Iran and Syria. Libya’s rebels are unlikely to resume crude production from territory under their control for “some time,” Reuters reported yesterday, citing Ali Tarhouni, the dissidents’ oil and finance minister.
Hedge-fund managers and other large speculators increased their net-long position in crude futures in the week ended May 24, according to Commodity Futures Trading Commission data.
Managed-money bets, in futures and options combined, that prices will rise outnumbered short positions by 225,677 futures, the Washington-based regulator said in its weekly Commitments of Traders report. Net long positions increased by 4,112 contracts, or 1.86 percent, from a week earlier.
US crude oil market are watching the price action around the pivotal $100
All eyes in the US crude oil market are watching the price action around the pivotal $100 a barrel level, as the price continues its narrow range around this key long term psychological level. The uncertainty mounting as to which way the price is going to break from here translates into a gradual narrowing of the range to form a classic Triangle chart pattern, show here on the 240-minute US Crude Oil futures chart.
![20110530dailycommimage_20110530072555[2]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPtFTL_4RLu_s_9K7UCrr48oCgAuujRAgnJ1Z5AY5X1nHg1ohUMTE1ES0WmR6-D_CtoxsqSbcgJjvVvbC8bDKHpXhwtBajuWEHoGlHq6rxdT77USD4HydX8sFXBO7Oz4ML18H73CSj1A/s1600-h/20110530dailycommimage_20110530072555%25255B2%25255D%25255B4%25255D.png "20110530dailycommimage_20110530072555[2]")
This Triangle chart pattern established a swing low to confirm support just below $100 late in last week’s trading, indicating the possibility this will play out as a continuation pattern with an eventual topside breakout, The formation is maturing quickly, as the price is now reaching the apex of the Triangle where support and resistance converge. With the distance between the two only around $2 per barrel currently, it is likely that the volatility in this market will initiate a directional breakout in the next two to three days of trading.
A breach of the support below $99.80 will signal a failure and project a lower price forecast, whereas a rally above $102.40 would confirm this as a continuation pattern with a call for a renewal of the long term up-trend.
Source: http://www.fxstreet.com/technical/forex-strategy/daily-commodities-update-technical/2011/05/30/
Crude oil futures slump on U.S. demand concerns
Forex Pros - Crude oil futures declined on Monday, slumping to a two-day low as worries that the U.S. economic recovery was faltering sparked concerns over a slowdown in demand from the world's largest user.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at USD100.05 a barrel during European morning trade, shedding 0.68%.
It earlier fell as much as 0.95% to USD99.75 a barrel, the lowest price since May 26.
Data on Friday showed that pending home sales in the U.S. plunged to a seven-month low in April, while a separate report showed that consumer spending rose less-than-expected last month, underscoring worries over the pace of the U.S. recovery.
Meanwhile, speculation that the Organization of the Petroleum Exporting Countries pumped more oil in May weighed on prices and eased concerns over a disruption to global supplies.
Preliminary data from OPEC showed that Saudi Arabia, Nigeria and Iraq increased their oil output in May to compensate for a further fall in Libyan production.
OPEC's next meeting is scheduled for June 8 in Vienna. Global financial service provider Barclays said that, "The trigger for the next move higher, in our view, could be the upcoming OPEC meeting on June 8, where the lack of a proactive approach to mitigating the shortfalls in the market could serve to significantly tighten balances."
Saudi Arabia's Prince Alwaleed bin Talal said in an interview on CNN on Sunday that an oil price of USD70 to USD80 a barrel was in the best interest of the kingdom
The rebellion in Libya, political turmoil in Bahrain and speculative buying are responsible for driving oil prices to more than $100 a barrel, Alwaleed said.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery edged 0.2% lower to trade at USD114.72 a barrel, up USD14.67 on its U.S. counterpart.
U.S. floor trading will be closed Monday for the Memorial Day holiday, while U.K. markets were to stay closed for the Spring Bank Holiday. Electronic trades will be booked with Tuesday's transactions for settlement purposes.
Read more: http://community.nasdaq.com/News/2011-05/crude-oil-futures-slump-on-us-demand-concerns.aspx?storyid=78072#ixzz1NqMOJhhm
Crude oil continues uptrend on US inventory data
Crude oil prices (Nymex June futures) were up by more than 1.5 percent in the last week. Oil prices gained on the back of weakness in the dollar, decline in US crude oil inventories and positive sentiments in the global markets.
Goldman Sachs raised its forecasts for North Sea Brent crude quoting that fuel demand growth will provide support to oil prices.
However, prices came under pressure mid-week due to poor GDP and jobless claims data from the US. On the MCX, the June futures contract gained almost 1 percent and touched a high of Rs 462 5/bbl.
Natural gas
Natural Gas Inventories increased
Gas prices surged around 4.5 percent on the Nymex mainly due to a weaker dollar and upbeat global market sentiments. But, rise in US natural gas inventories capped further gains.
Report released by the US Energy Department showed that natural gas stocks increased more than expected by 105 billion cubic feet lbcf) for the week ending 21 May.
Prices touched a high of S4.563/mmBtu and close at $4.5 18/mmBtu. On the MCX, natural gas rallied more than 7percent and closed at RS 205.3 in the last week.
Outlook
Oil prices on the M are expected to trade on a rangebound note today as us markets remain closed on account of Memorial Day Holiday.
Prices will take cues from news and development on the Euro Zone front and risk sentiments in the global financial markets.
Courtesy: Angel Commodities
Sunday, 22 May 2011
Crude Oil Weekly Fundamental Analysis for May 23-27, 2011
Crude oil prices fell during this past week, where crude oil prices settled below $100 a barrel amid the strong wave of pessimism that continued to weigh down on commodity markets, and forced crude oil prices to remain under pressure, as investors are worried over the outlook for global growth, with signs emerging that major economies around the world are slowing down, which weighed down on crude oil prices.
The outlook for crude oil prices remains very unclear, but the clear thing is that volatility will continue to dominate crude oil movements, but overall, crude oil prices could still drop further during this upcoming week, noting important economic reports will be released from the United States on growth, income, and spending, which could affect crude oil prices heavily.
Highlights for this week that will probably affect the Crude Oil direction are:
Tuesday 14:00, the U.S. will release the new home sales index for the month of April, where new home sales are expected to rise by 1.7% to an annual rate of 305,000 units, compared with the prior estimate of 300,000 units, although the housing market showed further weakness in April, as the housing market remains depressed.
Wednesday 12:30, the U.S. will release the durable goods orders for the month of April, where durable goods orders are expected to drop by 2.0%, compared with the prior rise of 2.5%, while durable goods excluding transportation are expected to rise by 0.6%, compared with the prior rise in March by 1.3%.
Wednesday 14:00, the U.S. will release the house price index for the month of March, where house prices are expected to fall by 0.5%, compared with the prior drop of 1.6%.
Wednesday, 14:30, The Department of Energy will release the weekly petroleum status for the week ending May 20, where the prior report showed that crude oil inventories decreased by 15,000 barrels.
Thursday 12:30, the U.S. will release the second estimate for Gross Domestic Product index for the first quarter of 2011, where GDP is expected to show the U.S. economy expanded by 2.2%, compared with the prior estimate of 1.8%, while personal consumption is expected to rise by 2.8%, compared with the prior rise of 2.7%. The GDP price index is expected to remain unchanged at 1.9% in the first quarter, while core PCE is also expected to remain unchanged at 1.5% during the first quarter of 2011.
Thursday 12:30, the jobless claims for the week ending May 21, will be released, where jobless claims dropped last week to 409,000, while continuing claims also fell to 3.711 million.
Friday 12:30, the income report will be released for the month of April, where personal income is expected to rise by 0.4% in April, compared with the prior rise of 0.5%, while personal spending is expected to rise by 0.4%, compared with the prior rise of 0.6%. The income report is also expected to show that core PCE rose in April by 0.2%, compared with 0.1% reported in March, while compared with a year earlier, core PCE is expected to rise by 1.0%, compared with the prior rise of 0.9%, and the PCE deflator is expected to rise by an annualized 2.1%, compared with the prior rise of 1.8%.
Friday 13:55, the University of Michigan will release the final estimate for consumer confidence in May, where consumer confidence is expected to remain unchanged at 72.4 in line with the prior estimate.
Friday 14:00, the U.S. will release the pending home sales index for April, where pending home sales are expected to drop by 1.0% in April, compared with the prior rise of 5.1% reported in March.
Crude Oil Daily Fundamental Analysis for May 23, 2011
Crude oil prices extended the drop on Friday, where another wave of pessimism dominated global markets amid the lack of economic news from the United States, where speculations mounted that growth in Germany was slowing down, while Greece’s fiscal problems continue to dominate investors on expectations Greece will restructure its debt. The pessimism sent the U.S. dollar higher against major currencies, and accordingly, crude oil prices remained under pressure on Friday.
We still maintain our bearish short term outlook for crude oil prices, since pessimism continues to dominate markets due to the uncertainty over global growth prospects, in addition to the recent data from the United States, which signaled economic weakness persisted through the second quarter, and the ongoing European debt saga, which continues to weigh down on confidence levels all around the globe, and that will put further pressure on crude oil prices.
Oil Technical Analysis for May 23, 2011
Light Sweet Crude
The CL retested the $95 area yet again on Friday, and just like every other time recently – the area held as support. This looks like a massive base being carved out in the oil markets, and that the next move could be upwards. Of course, there are no guarantees – but this market looks like it is struggling to go down, and seriously needs to rise. A break of Friday’s highs could send in more buyers.
Brent
Just like its cousin, the Brent markets fell and formed a nice hammer right at support. Because of this we feel that this market has a bullish bias as well. Look for it to follow the CL contract, and buyers will be involved just above the Friday highs. Selling is going to be very difficult as lonas we are above the all-important $105 level.
Source: http://www.commoditiesmansion.com/technical-analysis/oil-technical-analysis-for-may-23-2011/
NYMEX-Crude up as June expires, closes week off a bit
* Short-covering on news of al Qaeda plot lifts prices
* Dollar gains versus euro on negative Greece news
* Coming up: API stocks data, 4:30 p.m. EDT, Tuesday
NEW YORK, May 20 (Reuters) - U.S. crude futures ended higher on Friday as a flurry of short-covering caused prices to rebound midday from early lows after news that al Qaeda had plotted last year to hijack or sink oil tankers to prompt.
The al Qaeda's aim was to cause a rise in prices and trigger an economic crisis in the West, U.S. officials said, citing intelligence gathered from Osama bin Laden's compound in Pakistan.[ID:nN20173119]
The officials added, however, that there was no indication of any specific or imminent terrorist attack being plotted.
Before the midday bounce, prices had fallen more than $2 a barrel, pressured by the strength of the dollar and on liquidations ahead of the expiration of front-month June contract CLM1 at the close. Some analysts said the day's erratic price swings were probably due to the illiquidity of the June contract and on technical pressures.
FUNDAMENTALS
* On the New York Mercantile Exchange, crude for June delivery expired and settled at $99.49 a barrel, gaining $1.05, or 1.07 percent, after trading from $95.99 to $99.89.
* For the week, front-month crude fell 16 cents, from the $99.65 settlement on May 13.
* NYMEX July crude CLN1 settled up $1.17, or 1.18 percent at $100.10, trading from $96.35 to $100.42.
* In London, ICE Brent for July delivery LCON1 settled at $112.39 a barrel, gaining 97 cents, or 0.86 percent.
* For the week, front-month Brent fell $1.44, or 1.27 percent, from the $113.83 settlement on May 13.
* NYMEX June RBOB RBM1 closed up 0.98 cent, or 0.33 percent, at $2.9358 a gallon. For the week, it fell 13.86 cents, or 4.51 percent, extending losses to a third week.
* NYMEX June heating oil HOM1 settled 2.36 cents higher, or 0.82 percent, at $2.9183 a gallon. For the week, it fell 2.39 cents or 0.81 percent, declining from the week to may 13, when prices rose 9.65 cents, or 3.39 pct.
* NYMEX speculators cut their net long positions by 34,149 contracts to 221,565 in week to May 17 while ICE WTI crude speculators reduced their net long positions by 1,283 contracts to 33,333 in the same week, the Commodity Futures Trading Commission said in a weekly report. [ID:nEMS3CA3JB]
* Total U.S. crude oil and petroleum product consumption jumped 5.2 percent in April from a year earlier to 19.886 million barrels per day, the American Petroleum Institute said in a monthly report. [ID:nN20219569]
* U.S. gasoline demand fell in April for the first time in three months as high pump prices took their toll on drivers, but diesel fuel use soared due to the improving economy, the API report showed.
* Demand for distillates, which included heating oil and diesel fuel, soared 15.2 percent to 4.270 million barrels per day. Diesel consumption alone soared nearly 26 percent, the API added.
* NATO has sunk eight Libyan warships and intercepted a fuel tanker it believed was heading for the military, the alliance said. [ID:nLDE74I27W]
* NATO said military and political pressure is weakening Muammar Gaddafi's hold on power and should eventually dislodge him. [nLDE74J1JD]
* At least 21 protesters were killed after Syrian security forces opened fire during pro-democracy protests, the Syrian Observatory for Human Rights said.
* For other news from the Middle East and North Africa, click on [TOP/MEAST]
MARKETS NEWS
* U.S. equities fell on euro-zone debt worries and as retailers dipped after a weak profit from bellwether Gap. [.N]
* Rating agency Fitch downgraded Greece's debt and Norway suspended a grant payment to the country, while anxiety gripped the market ahead of Spain's regional election this weekend--all causing the euro to sink against the dollar. [USD/] .DXY
* Gold rose 1.5 percent, its biggest daily gain in two weeks, on safe-haven buying as investors fretted about euro zone debt after Fitch cut Greece's credit ratings.
* Copper closed the week on a stronger footing, touching its highest in more than two weeks as evidence of strengthening Chinese demand gave values a firm boost. [MET/L]
UPCOMING DATA/EVENTS
* U.S, Energy Information Administration's weekly petroleum inventories data, 10:30 a.m. EDT (1430 GMT), Wednesday.
SETTLE NET PCT LOW HIGH CURRENT DAY AGO
CHNG CHNG VOL VOL
CLc1 99.49 1.05 1.1% 95.99 99.89 30,343 142,668
CLc2 100.10 1.17 1.2% 96.35 100.42 379,029 311,515
LCOc1 112.39 0.97 0.9% 108.60 112.88 209,409 163,744
RBc1 2.9358 0.0098 0.3% 2.8563 2.9587 23,086 36,813
RBc2 2.9203 0.0163 0.6% 2.8435 2.9435 43,585 45,863
HOc1 2.9183 0.0236 0.8% 2.8261 2.9408 16,818 33,109
HOc2 2.9320 0.0235 0.8% 2.8395 2.9534 40,221 37,852
TOTAL MARKET VOLUME OPEN INTEREST
CURRENT May 19 30D AVG May 19 NET CHNG
CRUDE 600,458 618,965 696,894 1,546,119 14,498
RBOB 101,105 130,429 155,882 280,688 4,450
HO 82,953 96,303 123,308 313,972 183
(Reporting by Gene Ramos and Robert Gibbons; Editing by
Marguerita Choy)
Saudi Oil Output Rises by 7.3% in First Quarter, Al Rajhi Says
Saudi Arabia, the world’s largest crude exporter, increased its daily oil output by 7.3 percent year-on-year in the first quarter to replace a fall in output from other OPEC member countries, Al Rajhi Capital said in a report.
The investment arm of Saudi Arabia’s largest lender by market value said today that it expects the price of West Texas Intermediate crude to average $93 a barrel this year, up by $6 from its previous estimate, as prices have advanced globally since February.
Based on current average prices of WTI and Saudi’s Arab Light crude, the investment bank said that it expects the country’s oil sector to grow by 6.6 percent on average in 2011. Non-oil private industries, which include petrochemicals producers, will grow by 5.5 percent, it said.
Saudi Arabia pumped 8.66 million barrels of oil a day on average in March, down 4 percent from its output of 9.02 million a day in the previous month, government data posted on the Joint Organization Data Initiative website on May 18 showed.
Oil Climbs in New York on Signs of Fuel Demand, Heads for Weekly Decline
Oil rose in New York, trimming its weekly decline, on signs of growing fuel demand in the world’s two biggest crude-consuming nations.
July delivery futures climbed as much as 1.2 percent following a 1.6 percent drop yesterday. U.S. jobless claims fell by a more-than-forecast 29,000 in the week ended May 14, according to the Labor Department. China’s diesel demand may climb as factories turn to the fuel this summer for power generation amid electricity rationing, Barclays Capital said.
“Oil is tracking macroeconomic events,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “With volumes pretty low we’re likely to remain within a narrow trading range, capped at about $114 for Brent, provided no fresh geopolitical jitters emerge.”
Crude for July delivery, the most active contract for West Texas Intermediate, rose as much as $1.16 to $100.09 a barrel in electronic trading on the New York Mercantile Exchange, and was at $99.19 at 12:54 p.m. London time. The June contract, which expires today, gained 30 cents to $98.74. Futures are 0.9 percent lower this week and up 45 percent in the past year.
Brent crude for July settlement was at $111.35, down 17 cents, at $111.25 a barrel on the London-based ICE Futures Europe exchange. It slipped 88 cents to $111.42 a barrel yesterday, the lowest settlement since May 17.
German Growth
Oil pared earlier gains after Germany’s Bundesbank said Europe’s largest economy will probably lose some growth momentum. The dollar gained 0.6 percent against the euro, reducing the appeal of commodities price in the U.S. currency.
European benchmark Brent traded at a premium of $12.05 a barrel to U.S. futures, compared with $12.49 yesterday. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21 as unrest spread in the Middle East and North Africa and stockpiles climbed at Cushing. The spread averaged 76 cents last year.
A gauge of the outlook for the U.S. economy for the next three to six months slid for the first time since June and sales of existing U.S. homes unexpectedly declined, reports showed yesterday.
“The market is still divided about the economic numbers out of the U.S.,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year.
The longest decline in the profit from producing diesel in Asia since August 2008 may be ending as China’s worst energy shortage in seven years forces factories to rely on the fuel to power generators, a Bloomberg survey showed.
China Demand
The return from processing crude into diesel, known as the crack spread, is likely to stay at about $18 a barrel through the summer after tumbling 24 percent over the past six weeks, according to the median estimate of four traders and refiners surveyed by Bloomberg News. The spread was $17.38 yesterday.
Diesel demand in China may increase 6.5 percent this year to 3.35 million barrels a day as manufacturers use the fuel in generators, according to the International Energy Agency. China is rationing electricity as utilities cut output because of rising coal costs and government price caps at the same time as supplies are curbed by the lowest water levels since 2003 on the Yangtze River, site of the world’s biggest hydropower dam.
Crude oil may rise next week as economic growth bolsters fuel demand in the U.S., the biggest oil-consuming country, a Bloomberg News survey showed.
Eighteen of 43 analysts, or 42 percent, forecast oil will increase through May 27. Fifteen respondents, or 35 percent, predicted prices will decline and 10 projected little change.
OPEC will raise exports by the most since mid-February this month to meet growing demand from Asia, according to tanker tracker Oil Movements. The Organization of Petroleum Exporting Countries will ship 22.91 million barrels a day in the four weeks to June 4, up 1.9 percent from 22.49 million in the period ended May 7, the consultant said yesterday in a report.
The International Energy Agency said yesterday that oil producers need to increase supplies as prices are threatening the global economic recovery. OPEC is next due to meet on June 8 in Vienna.
Oil prices end week above $100
Oil prices rose at the end of the week with US crude contracts returning above the US$100/barrel level.
The minutes from the latest meeting of the Federal Open Market Committee showed that the policymakers discussed the exit strategy from the economic stimulus programme, triggering speculation that the Fed could tighten monetary policy sooner than expected. The FOMC minutes lifted the US dollar and pushed down oil prices as an increase in the Fed’s ultra low interest rates and withdrawal of the stimulus programme could dent energy demand.
However, president of the Federal Reserve Bank of Chicago Charles Evans said later in the week that the current loose monetary policy had to be retained for some time and no changes were warranted.
This week’s inventories data provided support for oil prices. Wednesday’s report from the US Department of Energy revealed a 15,000 barrel drop in US crude oil stockpiles. Analysts were expecting to see a gain of over 1.5 million barrels.
The bullish supply data was offset by statements from the International Energy Agency (IEA), which encouraged oil producers to raise output. The agency said that despite undergoing a 10 percent correction since 5 May, the prices remained at elevated levels, which could cripple the global economic recovery.
US light, sweet crude for July delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), stood at US$100.10/barrel, while August crude reached US$100.48/barrel.
July Brent crude last traded at US$112.42/barrel on the ICE Exchange.
BP (LON:BP) climbed from 442 pence to 460 pence over the past five days of trading. Fellow supermajor Royal Dutch Shell (LON:RDSB), Tullow Oil (LON:TLW) and Cairn Energy (LON:CNE) were unchanged at 2,150 pence, 1,331 pence and 429 pence respectively. BG Group (LON:BG) rallied from 1,322 pence to 1,378 pence.
Source: http://www.proactiveinvestors.co.uk/companies/news/28488/oil-prices-end-week-above-100-28488.html
