Better Fill up today

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Feb-09 Crude is trading at $48.325, down $0.255, Feb-09 Natural Gas is trading at $5.99, up $0.007.

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Crude Oil Falls Before Report Forecast to Show Stockpile Gain


By Grant Smith

Jan. 7 (Bloomberg) -- Crude oil fell for a second day before a report forecast to show that crude inventories increased in the U.S. as its economy contracted.

U.S. crude oil stockpiles probably rose for a second week in the week ended Jan. 2, according to a Bloomberg News survey before an Energy Department report today. Traders are seeking as many as 10 supertankers to store crude, according to Frontline Ltd., the largest owner of the vessels, suggesting demand for oil remains weak.

R20;The fall in demand is still one of the factors that will keep prices down for a while," said Gerrit Zambo, an oil trader at BayernLB in Munich. "There is enough oil for traders to put it in storage and profit by selling it later. You can only do this if no one wants to buy this oil now."

Oil for February delivery declined as much as 97 cents, or 2 percent, to $47.61 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $47.81 at 10:02 a.m. London time.

Yesterday, crude reached a five-week high because of the conflict between Israel and Hamas, RussiaR17;s gas dispute with Ukraine, and signs that OPEC members are enacting supply cuts. It later fell as manufacturing data indicated the U.S. recession is deepening.

Iran, the Middle East's second largest oil exporter, will trim exports to two refiners in Asia in February, officials from the companies said today, to conform with OPEC's Dec. 17 decision to curb supplies.

The U.S. Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington.



U.S. crude oil stockpiles probably increased 900,000 barrels in the week ended Jan. 2, from 318.7 million the week before, according to the median forecast of 10 analysts surveyed by Bloomberg News.

R20;WeR17;ve seen over the last few months that the market has been really focused on demand," said Gerard Burg, an energy economist at National Australia Bank Ltd. in Melbourne. "Anytime we get negative economic news out of the U.S. it puts a damper on the crude market."

Supplies of distillate fuel, a category that includes heating oil and diesel, probably increased 1.1 million barrels from 136 million barrels. Refineries probably operated at 82.5 percent of capacity, unchanged from the week before, when they ran at the lowest since the period ended Oct. 10 because of damage caused by Hurricanes Gustav and Ike.

Gasoline inventories rose 1 million barrels from 208.1 million, according to the survey. It would be the fifth consecutive weekly gain. Gasoline supplies have risen in 12 out of the past 14 weeks.

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Feb-09 Crude settled at $42.63, down $5.95 on the day, Feb-09 Natural Gas settled at $5.872, down $0.111 on the day. 
The Doe inventory report came out with a bigger than expected build in Crude Oil, Gasoline, Distillate fuel and Propane.

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Feb-09 Crude is trading at $41.25, down $0.45, Feb-09 Natural Gas is trading at $5.59, down $0.007. 

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Feb-09 Crude settled at $40.83, down $0.87 on the day, Feb-09 Natural Gas settled at $5.516, down $0.067
on the day.

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Feb-09 Crude is trading at $38.50, down $2.33, Feb-09 Natural Gas is trading at $5.51, down $0.006.   

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Crude Oil Falls Below $40 as Demand Drops Faster Than Supply

By Grant Smith and Angela Macdonald-Smith

Jan. 12 (Bloomberg) -- Crude oil fell below $40 in New York on concern production cuts by the Organization of Petroleum Exporting Countries will fail to counter a slump in demand.

Oil consumption will fall by 1 million barrels a day this year as the U.S., Europe and Japan face their first simultaneous recessions since the Second World War, Deutsche Bank AG predicted last week. U.S. stockpiles have climbed in 13 of the past 15 weeks, according to the Energy Department. OPEC members signaled last week they will curb sales to refiners in February.

R20;The health of the global economy is the dominant consideration in the short term, and that is weighing down on prices," said Harry Tchilinguirian, senior market analyst at BNP Paribas SA in London. "OPEC cuts may prove to be supportive in future but it'll take time for them to take effect."

Crude oil for February delivery fell as much as $2.40, or 5.9 percent, to $38.43 a barrel in electronic trading on the New York Mercantile Exchange. It was at $38.52 a barrel at 11:28 a.m. in London.

China, the fastest-growing oil consumer, may miss the government's 8 percent economic growth target, two top officials said today. Oil prices fell 12 percent last week as economic data showed the economic slump worsening. On Jan. 9, the U.S. said it lost 2.589 million jobs last year, the most since 1945.

OPEC, supplier of more than 40 percent of the world's oil, agreed last month to slash production quotas by 9 percent to revive prices as the global recession erodes demand. Oil has plunged more than $100 in the last six months.

Saudi Notices

Saudi Aramco, the world's biggest state oil company, sent notices to refiners in Asia on Jan. 9 that it would lower crude supplies to Asia by around 10 percent in February. This was the third month the company had reduced sales.

R20;Although OPEC have made substantial production cuts there is an overhang of prompt oil and until that is absorbed the market may not rally substantially," Christopher Bellew, senior broker at Bache Commodities Ltd. in London.

OPEC may trim production further should crude prices continue to decline, IranR17;s OPEC Governor Mohammad Ali Khatabi said Jan. 11. OPEC is scheduled to meet next in Vienna on March 15. Iran is the group's second-largest producer, after Saudi Arabia.

Oil for March delivery is at a more than $5 a barrel premium to the front-month contract, while the April future is $9 above February-delivered supplies. The situation where near- term crude is cheaper than later-dated oil is called contango.

R20;The curve is very steep, which is consistent with the view that the market tightens up in time and we get higher prices down the track," said David Moore, a commodity strategist at Commonwealth Bank of Australia. "It will take a while for those production cuts to eat away at inventories."

Cushing Stockpiles

Oil for February dropped last week as stockpiles at Cushing, Oklahoma, the delivery point for crude traded at Nymex, climbed to 32.2 million barrels, the highest since the U.S. Energy Department started tracking the supplies in 2004. Total capacity in the area is about 47.7 million barrels, according to estimates from Andy Lipow at Houston-based consultants Lipow Oil Associates LLC.

Brent crude for February settlement fell as much as $2.02, or 4.6 percent, to $42.40 a barrel on LondonR17;s ICE Futures Europe exchange. It was at $42.54 a barrel at 11:29 a.m. London time.

Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended Jan. 6, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 76,658 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 12,110 contracts, or 19 percent, from a week earlier.

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Feb-09 Crude settled at $37.59, down $3.24 on the day, Feb-09 Natural Gas settled at $5.542, up $0.026 on the day.

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Feb-09 Crude is trading at $36.825, down $0.765, Feb-09 Natural Gas is trading at $5.465, down $0.077.

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Crude Oil Falls for Sixth Day on Concern Stockpiles Are Rising


By Grant Smith

Jan. 13 (Bloomberg) -- Crude oil fell for a sixth day in New York, its longest decline in a month, on speculation that slumping demand caused U.S. crude inventories to accumulate.

U.S. crude stockpiles probably gained 2.25 million barrels in the week ended Jan. 9, according to a Bloomberg survey before an Energy Department report tomorrow. That would be the 14th gain in 16 weeks. The U.S. economy will contract 1.5 percent in 2009, a monthly poll of economists showed.

“The U.S. inventory build-ups have been massive,” said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. “Coupled with weak economic data, they are keeping near-month prices under strong pressure.”

Crude oil for February delivery fell as much as $1.49, or 4 percent, to $36.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract, down 25 percent in six days, traded for $36.92 a barrel at 10:39 a.m. London time.

Futures, down 61 percent from a year ago, declined $3.24 to $37.59 a barrel yesterday, the lowest settlement since Dec. 24. Oil for February delivery is now at a 35 percent discount to the December future, a market situation known as contango where traders fetch higher prices for contracts for later delivery.

China, the world’s second-largest energy user after the U.S., increased crude-oil imports by 12 percent last month as the country took advantage of falling fuel purchase costs to boost stockpiles.

Imports rose to 14.37 million metric tons from a year earlier, the Beijing-based Customs General Administration of China said on its Web site today. Full-year imports increased 9.6 percent to 178.9 million tons.

Commodities Drop

Most commodities declined yesterday because of falling demand for raw materials, with corn, soybeans and wheat dropping the most allowed by the Chicago Board of Trade in a single day. The Reuters/Jefferies CRB Index of 19 commodities slid as much as 4 percent.

Brent crude oil for February settlement fell as much as $1.07, or 2.5 percent, to $41.84 a barrel on London’s ICE Futures Europe exchange. It was at $42.92 a barrel at 10:16 a.m. London time.

U.S. crude-oil and fuel inventories probably rose last week as refineries reduced operating rates and the recession curbed consumption, a Bloomberg News survey of analysts showed.

Crude-oil stockpiles probably increased 2.25 million barrels in the week ended Jan. 9 from 325.4 million the week before, according to the median of eight analyst estimates before an Energy Department report this week.

Gasoline Stockpiles

Gasoline stockpiles probably rose 1.5 million barrels from 211.4 million, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably climbed 1.5 million barrels from 137.8 million.

Gasoline for February delivery dropped as much as 1.5 cents, or 1.4 percent, to $1.0691 a gallon in New York, and last traded at 108.50 as of 10:17 a.m. in London.

The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.

The U.S. economy will contract 1.5 percent this year, a half percentage point more than projected last month, according to the median of 59 forecasts in the survey taken from Jan. 5 to Jan. 12.

“I don’t see much movement in the oil price this year, prices won’t go much above $50 a barrel,” Mohammed al-Rumhy, Oil Minister of Oman, said in an interview in New Delhi today. “Of course, it depends on Obama’s success -- he wants to create 4 million jobs, so if we have 4 million new drivers tomorrow that we don’t have today, demand will rise and so will the price.”

OPEC Cuts

The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, agreed last month to slash production quotas by 9 percent to revive prices as the global recession erodes demand. Oil has plunged more than $100 a barrel in the past six months.

Saudi Arabian Oil Co., the world’s biggest state oil company, sent notices to refiners in Asia on Jan. 9 that it would lower crude supplies to the region by about 10 percent in February. This was the third straight month that the company reduced sales.