Better Fill up today

[frawin]

Oil Little Changed on Forecast U.S. Inventories Rose Last Week

By Grant Smith

April 22 (Bloomberg) -- Oil traded little changed before a report today forecast to show inventories in the U.S., the world's largest energy consumer, rose from their highest level since 1990 as the recession reduced demand.

Crude oil stockpiles probably rose by 2.5 million barrels in the week ended April 17 from 366.7 million the previous week, the highest since September 1990, according to a Bloomberg survey before today's Energy Department report. The U.S. dollar strengthened the most in a month against the euro, limiting demand for commodities as a hedge against inflation.

R20;Crude stock levels are still historically very high,R21; said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "It would take something quite bullish in the inventory data to take us back over $50, and I don't see that happening."

Crude oil for June delivery traded at $48.67 a barrel, up 12 cents, or 0.3 percent, in electronic trading on the New York Mercantile Exchange at 10:05 a.m. London time.

JapanR17;s crude oil imports fell in March for a fifth month, declining 18.4 percent from a year earlier to about 3.68 million barrels a day, a finance ministry preliminary trade report released in Tokyo showed. South Korea used 66.6 million barrels of oil products last month, down from 68.3 million barrels a year earlier, according to data from Korea National Oil Corp.

Yesterday, the industry-funded American Petroleum Institute reported that inventories declined 1.01 million barrels to 370.2 million last week, the first drop since March 6.

Energy Department

The Energy Department will probably show that gasoline stockpiles dropped 700,000 barrels from 216.5 million the prior week, according to the Bloomberg survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably fell by 1 million barrels from 139.6 million barrels.

Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.

API collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The Energy Department requires reports to be filed for its weekly supply survey.

Brent crude oil for June settlement gained as much as 50 cents, or 1 percent, to $50.32 a barrel on LondonR17;s ICE Futures Europe Exchange. It was at $49.95 a barrel at 10:05 a.m. London time.

The dollar was at $1.2917 against the euro, up from $1.2965 in New York yesterday. It earlier touched $1.2886, the strongest since March 16.

[frawin]

The long term future for energy prices is up. This is what happens when you have low energy prices and the Government pushing to put heavy tax burdens on the industry. The current Democrat Controlled Senate, House and White House have been pushing to tax the oil industry heavily and the results of that will cost the people.



Deepwater-Rig Use Slows on Economy, Oil Prices, Says Transocean


April 22 (Bloomberg) -- Demand for deepwater drilling equipment, led by Brazil and India, continues to grow at a slower pace amid the global recession and lower crude oil prices, said Transocean Inc., the world's largest offshore oil driller.

The Geneva-based company is still participating in bids even as the number of tenders has declined, said Deepak Munganahalli, senior vice president for the Asia-Pacific region, at a conference in Singapore today. About 25 deepwater assets will become available within the next two to three years.

R20;ThatR17;s a very small number,R21; Munganahalli said at Sea Asia 2009. "Even last month there were significant fixtures in Brazil.R21;

Oil and gas explorers are postponing or scrapping deepwater projects, potentially reducing crude supplies by as much as 2.4 million barrels a day in 2011, Morgan Stanley said in a report in March. Oil prices in New York have declined 66 percent after soaring to a record $147.27 a barrel in July last year.

Day rates for drilling and support equipment for most contractors aren't affected because the vessels were contracted before the recession for three- to five-year periods, Lionel Lee, managing director, Ezra Holdings Ltd., said at the conference. There will be pressure on pricing in the next tender, he said.

No new contracts have been awarded since August 2008 when Morgan Stanley estimated that companies needed 139 new production platforms to develop fields in deep seas. Since then, 11 orders have been canceled and 46 delayed by an average 15 months, according to last month's Morgan Stanley report.

Worldwide spending on oil and gas exploration may drop 12 percent in 2009 to $400 billion, according to a report in December by Barclays Capital Research.

[larryJ]

yep, they are gonna get ya one way or another      Larryj     

[Diane Amberg]

Just out of curiosity, what would the effect be if the taxes were not raised? Extra profit or something better?

[frawin]

Diane, if they pay more in taxes they will have less to invest in drilling and expolration. The Oil companies have always invested heavily in drilling, Exploration, refining and research. If they don't invest there production goes down, their revenue goes down and their profits go down. The American people have always enjoyed the most plentiful supply of energy at the lowest prices, thanks to the Oil companies. The Democrat/Liberal/Left mentality has always been to tax them more  so they have less to spend on energy.
With 4.7 % of the world population the US was consuming 25% of the World Oil, the US Companies developed the oil in nearly every country in the world. Who do the Democrats want to depend on for your energy needs, Iran, Venzuela, North Yemen, Russia, do we want to depend on countries that are our sworn enemies, I don't.
The US Oil Companies are some of the best managed companies in the world, their management has always kept sufficent capital to get by the good times and the bad.

[frawin]

Oil Gains a Third Day as Weaker Dollar Spurs Inflation Hedging
By Grant Smith

April 23 (Bloomberg) -- Crude oil rose for a third day in New York as the dollar dropped against the euro, bolstering the appeal of commodities as a currency hedge.

Oil rebounded after the U.S. Energy Department reported yesterday that crude stockpiles rose for a seventh week to the highest since September 1990. The U.S. currency dropped the most in a week against the Euro, increasing demand for crude as a defense against rising inflation.

"The market is reacting to the weaker dollar," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. "This is desperately needed after yesterday's bearish inventory data. And the market is drawing support from the fact that European equities are not down so much as they were earlier."

Crude oil for June delivery rose as much as 80 cents, or 1.6 percent, to $49.65 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $49.64 at 12:09 p.m. London time.

The euro rose against the yen and the dollar after a report showed an index of European services and manufacturing industries increased more than economists expected, adding to evidence the region's slump is easing.

The common European currency traded at $1.3024, from $1.3005, after falling as low as $1.2980.

Europe's Dow Jones Stoxx 600 Index was little changed at 192.43 as of 11:25 a.m. in London, after declining as much as 1 percent earlier.

"For now the oil market will remain buffeted between bearish fundamentals and bouts of optimism coming from the equity markets," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "The surplus in U.S. crude inventories is quite certain."

[Diane Amberg]

Thanks Frank, I have learned a lot from you.

[Catwoman]

Ditto...I missed reading you. 

[frawin]

Oil Rises a Fourth Day as Dollar, Equities Trump Demand Concern


By Grant Smith

April 24 (Bloomberg) -- Crude oil rose for a fourth day as advancing European equities and a weaker dollar outweighed concern the recession will continue to cut fuel demand.

In Iraq, holder of the world's third-largest crude reserves, a double suicide bombing in Baghdad killed 25 people during a second day of violence. Oil earlier fell on signs that the Organization of Petroleum Exporting Countries isn't cutting supplies fast enough to reduce the glut in inventories. U.S. crude stockpiles are at their highest in nearly 19 years.

"While currency or equity moves are lending support to oil markets currently, a reality check will have to be made given the development of a large crude inventory overhang, and more downgrades to economic growth," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London.

Crude oil for June delivery increased as much as 52 cents, or 1.1 percent, to $50.14 a barrel on the New York Mercantile Exchange. It traded at $50 a barrel at 12:05 p.m. London time. Prices are heading for a 0.6 percent weekly drop.

Crude has declined 67 percent from a record $147.27 a barrel reached on July 11 as global demand has dropped.

"Prices are likely to trade around current levels until hard evidence emerges that the various stimulus packages are improving oil demand and that OPEC restraint is contributing to a fall in inventories," said Gareth Lewis-Davies, oil market analyst at Dresdner Kleinwort in London.

OPEC Secretary-General Abdalla El-Badri wants the group to fully implement supply cuts agreed last year before it discusses any further reductions, Dow Jones Newswires reported, citing an interview with El-Badri.

Further Action

Still, the group won't hesitate to take further action if needed at its next meeting on May 28, El-Badri said, according to Dow. OPEC isn't formally obligated to reach its output targets before announcing new cuts.

OPEC will trim crude oil shipments by 0.6 percent in the four weeks ending May 9, the smallest drop since February, tanker-tracker Oil Movements said yesterday.

Europe's Dow Jones Stoxx 600 Index added 0.4 percent to 192.24 at 10:46 a.m. in London, trimming this week's decline to 2.4 percent. The dollar dropped 1.2 percent to $1.3232 against the euro, making assets priced in the U.S. currency more attractive as a currency hedge.

U.S. crude stockpiles grew for a seventh week last week, by 3.86 million barrels to 370.6 million, an Energy Department report showed on April 22. That's the highest since September 1990.

Fuel Demand

Total daily fuel demand in the U.S., the world's largest oil consumer, averaged 18.5 million barrels a day in the four weeks ended April 17, down 6.5 percent from a year earlier, according to the department.

Nippon Oil Corp., Japan's largest refiner, will cut fuel production by about 6 percent next month from year-earlier levels as the recession in Japan weakens petroleum demand, the company said today.

Crude oil may decline next week on speculation that U.S. inventories will increase because the recession has cut consumption.

Sixteen of 35 analysts surveyed by Bloomberg News, or 46 percent, said futures will fall through May 1. Eleven respondents, or 31 percent, forecast that oil prices will be little changed, and eight said the market will rise. Last week, 52 percent of analysts expected prices to be little changed.

Brent crude oil for June settlement was at $50.35 a barrel, 24 cents higher, at 11:43 a.m. London time on London's ICE Futures Europe exchange.


Last Updated: April 24, 2009 07:07 EDT

[frawin]

Oil Declines Most in a Week on Concern Over Economy, Swine Flu

By Grant Smith

April 27 (Bloomberg) -- Crude oil fell the most in a week on concern the U.S. economy will keep shrinking and the swine- flu outbreak will curtail air travel.

The economy in the world's largest oil consumer will continue to contract "for some time," Lawrence Summers, director of the White House National Economic Council, said yesterday. Increased output by non-OPEC producers has left the market oversupplied by about 720,000 barrels a day, Algerian Oil Minister Chakib Khelil said.

"On the downside we have weak demand worldwide that's leading to high inventories and massive spare capacity at the OPEC," said Eugen Weinberg, analyst at Commerzbank AG in Frankfurt. "Joining these unknowns we now have the swine flu."

Crude oil for June delivery fell as much as $2.90, or 5.6 percent, to $48.65 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $49.15 a barrel at 11:49 a.m. in London.

Stocks declined around the world, Treasuries gained and the yen strengthened after the swine-flu outbreak spread beyond Mexico and the U.S. as the American government declared a public health emergency. The Dow Jones Stoxx 600 Index of European shares dropped 1.1 percent, led by airlines.

The dollar increased the most against the euro in more than a week on speculation the European Central Bank will lower interest rates at its meeting next month. The U.S. currency traded 0.9 percent higher at $1.316 per euro, limiting the appeal of dollar-priced commodities like crude used to hedge against inflation.

Swine Flu

Air China Ltd., Singapore Airlines Ltd. and Qantas Airways Ltd. led declines by Asia-Pacific carriers on speculation the swine-flu cases may limit travel. Trips on the region's airlines plummeted after the outbreak of Severe Acute Respiratory Syndrome in 2002 and 2003 in China, Singapore and Hong Kong.

"The airline stocks have all sunk," said Victor Shum, a senior principal at oil industry consultants Purvin & Gertz Inc. in Singapore. "The concern is that this gets to be like SARS and then that will impact the jet-fuel markets and global economy."

Crude prices need to be at $70 a barrel to ensure continued investment in the industry, Abdalla el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said in Algiers yesterday. Oil may reach $60 a barrel by the end of 2009, Khelil said.

OPEC Output

OPEC pumps about 40 percent of the world's oil. The group agreed last year to cut output by 4.2 million barrels and will review production again when it meets May 28.

Saudi Arabia, the biggest producer, is under pressure from the rest of OPEC to pare output further, the kingdom's former oil minister Sheikh Ahmad Zaki Yamani said in Cairo yesterday.

Crude prices gained last week as stock markets climbed amid optimism that the world is past the worst of the recession.

U.S. oil stockpiles rose for a seventh week to 370.6 million barrels on April 17, the highest since September 1990.

Hedge-fund managers and other large speculators are betting on falling New York oil futures for the first time in six weeks, according to U.S. Commodity Futures Trading Commission data.

Speculative net-short positions, or bets prices will fall, outnumbered long positions by 14,605 contracts on April 21, the Washington-based commission said April 24. A week earlier, traders were net-long 4,962 contracts.

Brent crude for June settlement fell as much as $2.66, or 5.2 percent, to $49.01 a barrel on London's ICE Futures Europe exchange.



Last Updated: April 27, 2009 07:13 EDT