Better Fill up today

[frawin]

I don't see that much difference between Socialist/Communist and Marxism. I said it before and it is becoming even more evident, Carl marx is smiling down on the Whitehouse and both houses of congress.

[Diane Amberg]

I'll never care for the generalizations and labels. It just doesn't set well with me. But Nixon really was a crook!....

[frawin]

Crude and Natural Gas are both trading up this A.M., although not that much in early trading.


Oil Rises After API Says Crude, Gasoline Inventories Contracted


By Grant Smith

May 6 (Bloomberg) -- Crude oil rose after the American Petroleum Institute said stockpiles of crude and gasoline fell last week in the U.S., the world's largest energy consumer.

U.S. crude inventories dropped by 1 million barrels, and gasoline declined by 2.9 million barrels, the industry-funded API said after floor trading closed yesterday. The U.S. Energy Department will release its report on supplies later today.

"The API draws of crude and gasoline could be a driver," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "There has to be a resolution to the large inventory overhang before the market can move durably higher. The current economic situation remains one of contraction."

Crude oil for June delivery rose as much as 1.1 percent to $54.44 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $54.02 as of 11:40 a.m. London time. Yesterday, the contract dropped 63 cents to settle at $53.84 a barrel. Oil is up 22 percent this year.

Oil's gains were capped as U.S. stock index futures retreated and the dollar advanced on speculation that government-run stress tests may show the country's largest banks need to raise more money. A stronger U.S. currency dulls demand for dollar-priced commodities used to hedge against inflation.

Futures on the Standard & Poor's 500 Index expiring in June fell 0.6 percent to 897.90, and the dollar traded at $1.3320 per euro as of 10 a.m. in London.

Regulators said Bank of America Corp. requires about $34 billion in new capital, the most among the 19 biggest U.S. banks subjected to stress tests. The Federal Reserve publishes stress test results tomorrow.

The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington. It may show that crude-oil inventories increased by 2.5 million barrels last week from 374.7 million in the previous week, according to a Bloomberg News survey. Refiners are producing less fuel on weaker demand for gasoline and diesel.

"We have to wait and see what the data shows tonight, and if that is consistent with the API numbers, it will be a bit more supportive for the oil price," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.

83% Capacity

Gasoline stockpiles probably rose 650,000 barrels from 212.6 million the prior week, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 144.1 million.

U.S. refineries probably operated at 83 percent of capacity last week, up 0.3 percentage point from the previous week, according to the median of responses in the survey. That would be down from 85 percent in the same week a year earlier and 89 percent in 2007.

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

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

Brent crude oil for June settlement increased as much as 1.2 percent to $54.74 on London's ICE Futures exchange. It traded at $54.34 at 11:40 a.m. The contract declined 46 cents, or 0.8 percent, to end the session at $54.12 a barrel yesterday.

[frawin]

Crude and Natural Gas are trading higher this morning.

Crude Oil Rises Above $57 as Refineries Signal Stronger Demand


By Grant Smith

May 7 (Bloomberg) -- Crude oil rose above $57 a barrel for the first time this year after a jump in U.S. refinery demand boosted speculation that economic activity is recovering.

U.S. refineries boosted operating rates last week to their highest level since December, the Energy Department said yesterday, and crude stockpiles increased less than analysts had estimated. European and Asian equities advanced after U.S. Treasury Secretary Timothy Geithner said tests of banks' capital needs will be "reassuring."

Crude oil for June delivery rose as much as $1.59, or 2.8 percent, to $57.93 a barrel on the New York Mercantile Exchange, the highest intraday price since Nov. 17. It was at $57.73 a barrel at 10:59 a.m. London time. Prices have gained 13 percent this week, heading for the biggest weekly gain since February.

"The market is thinking the recession will end earlier than was expected a few months ago," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "It looks like prices will continue to increase, but I don't see crude above $60 in the short term."

U.S. refiners operated at 85.3 percent of capacity in the week ended May 1, up 2.7 percentage points from the week before, the Energy Department report showed. Crude inventories rose by 605,000 barrels last week, versus analysts' forecasts for a gain of 2.5 million barrels.

Gasoline supplies fell 167,000 barrels to 212.4 million in the week ended May 1, the Energy Department report showed. A 550,000-barrel gain was forecast, according to the median of 16 analyst responses in the Bloomberg News survey.

Still, the increase in U.S. crude supplies brought inventories to 375.3 million barrels last week, the highest since 1990.

'Taking Heart'

"The market is indeed shrugging the bearish fundamentals and may rather be taking heart from the reassuring comments from Treasury Secretary Geithner," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "Demand is still weak. Before any durable move higher, the inventory overhang will need to be resolved."

Crude has broken through the $55.02 to $56.10 a barrel range that technical analysts at Barclays Capital said could trigger a move to $62. Prices may now surge to $71.55 by completing an inverted "head and shoulders" formation that started in December, according to a report by the bank.

Brent crude oil for June settlement rose as much as $1.63, or 2.9 percent, to $57.78 a barrel on London's ICE Futures Europe exchange. That's the highest intraday price since Jan. 7. It was at $57.37 a barrel at 10:58 a.m. London time.

[frawin]

Crude Oil Reaches Six-Month High on Speculation Demand May Rise


By Alexander Kwiatkowski

May 12 (Bloomberg) -- Oil rose to a six-month high in New York as a rebound in equity markets stoked speculation that an economic recovery will reduce a glut of fuel supplies.

Crude futures advanced after European stock markets erased losses and the U.S. dollar weakened, boosting the appeal of commodities to investors. Europe's Dow Jones Stoxx 600 Index advanced 0.7 percent to 207.97 in London. Oil's gain overrode analyst forecasts that stockpiles are still rising.

"Improving sentiment is driving equities higher and the U.S. dollar lower, which are both quite positive for oil prices," said Eugen Weinberg, senior analyst at Commerzbank AG in Frankfurt. "People are counting on economic recovery soon."

Crude oil for June delivery rose as much as $1.14, or 2 percent, to $59.63 a barrel on the New York Mercantile Exchange, the highest since Nov. 14, 2008. It traded at $59.62 as of 10:20 a.m. in London, up 34 percent this year. Yesterday, oil dropped as much as 3.2 percent before settling at $58.50, down 0.2 percent.

"Equities are still holding firm and the weakness in the U.S. dollar is supporting the oil market," said Andrey Kryuchenkov, an analyst at VTB Capital in London. The market is waiting for tomorrow's Energy Department report on U.S. stockpiles, he said.

U.S. inventories probably gained 1 million barrels last week, according to the median of 12 responses in a Bloomberg News survey. They climbed to 375.3 million barrels in the week ended May 1, the highest since September 1990, according to the Energy Department data.

The dollar dropped to $1.3670 against the euro from $1.3582 yesterday. A weaker dollar encourages investors to buy commodities such as oil as a hedge against inflation.

Brent crude oil for June settlement rose as much as 1.5 percent to $58.26 a barrel on London's ICE Futures Europe exchange after falling as low as $56.87. The contract traded at $58.26 at 10:35 a.m. local time.

[frawin]

Crude is trading at $59.325 up $0.825, Natural Gas is trading at $4.36 up $0.058. The outer months are trading even higher.

[frawin]

Oil Gains for Second Day on Drop in Stockpiles, Weaker Dollar

By Alexander Kwiatkowski and Christian Schmollinger

May 13 (Bloomberg) -- Oil rose for a second day after an industry group reported U.S. crude stockpiles dropped for the second week in a row and the dollar declined.

Oil supplies fell by 3.13 million barrels to 370.7 million last week, the American Petroleum Institute said late yesterday. The U.S. Energy Department is due to post its report on crude inventory later today.

"With more data out today, there is now a hope they will also show inventories are no longer increasing," said Sintje Diek, an analyst at HSH Nordbank in Hamburg. "People are expecting that oil demand will be stronger again and everything will recover."

Crude oil for June delivery rose as much as $1.05, or 1.8 percent, to $59.90 a barrel and traded at $59.44 on the New York Mercantile Exchange at 11:10 a.m. in London. Yesterday, it climbed as much as 2.7 percent to $60.08 a barrel before closing at $58.85, the highest settlement since Nov. 11.

Options for June-delivery Nymex crude contracts will expire tomorrow, and the majority of trading is centered on a strike price of $60 for options to buy and sell. The underlying June futures will expire on May 19.

Oil has climbed 34 percent this year, tracking global equity markets on optimism that an economic recovery will spur demand for fuel. Additional support for crude prices came from the dollar, which fell to the lowest level against the euro since March, bolstering demand for commodities as a hedge against inflation.

"The major play seems to be the weakening dollar," said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. "If the dollar continues to weaken to $1.40 euro or worse, oil will be pressured to go higher."

Weaker Dollar

The dollar fell to $1.3679 per euro at 10:20 a.m. in London from $1.3648 yesterday in New York. It earlier touched $1.3722, the weakest level since March 23.

Refiners in China, the world's second-biggest energy- consuming country, increased crude-oil processing volume by 6 percent last month, the China Mainland Marketing Research Co. said in a faxed statement today.

Gasoline output in April gained 20 percent to 5.76 million tons, while diesel production rose 0.7 percent to 10.6 million tons, it added.

The U.S. Energy Department report on inventories is expected to show a 1 million barrels gain, according to an analysts' survey. Totals from the API and the government moved in the same direction 75 percent of the time over the past four years, Bloomberg data shows.

Supplies rose to 375.3 million barrels in the week ended May 1, the highest since September 1990, the Energy Department said on May 6.

Second Weekly Drop

API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. Crude oil inventories fell by 1 million barrels for the week ending May 1, the API said May 5.

The Organization of Petroleum Exporting Countries' monthly report on supply and demand for oil is due later today.

Analysts are split over whether gasoline stockpiles rose or fell last week. Supplies of distillate fuel, a category that includes heating oil and diesel, probably increased 1.25 million barrels, according to the Bloomberg News survey. The department is scheduled to release its weekly petroleum inventory report today at 10:30 a.m. in Washington.

U.S. travel during the Memorial Day holiday will rise about 1.5 percent from last year as lower pump prices encourage vacationers, AAA, the nation's biggest motoring organization, said yesterday.

Gasoline Futures

Gasoline futures for June delivery rose 2 cents, or 1.2 percent, to $1.6879 a gallon at 11 a.m. in London on the Nymex. The contract yesterday dropped 1.23 cents, or 0.7 percent, to settle at $1.6679 a gallon.

Brent crude oil for June settlement gained as much as $1.11, or 1.9 percent, to $59.05 a barrel on London's ICE Futures Europe exchange. It was at $58.26 a barrel at 11:10 a.m. local time. It declined 0.8 percent to end the session at $57.94 a barrel yesterday.

[frawin]

Below are excerpts from this week's EIA-DOE Crude and Products Inventory Report:

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At
370.6 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 4.1 million barrels last week, and are in the middle of the 
average range. Both finished gasoline inventories and gasoline blending
components inventories decreased last week. Distillate fuel inventories
increased by 1.0 million barrels, and are above the upper boundary of the
average range for this time of year. Propane/propylene inventories increased by
0.7 million barrels last week and are above the upper limit of the average
range. Total commercial petroleum inventories decreased by 1.2 million barrels
last week, and are above the upper limit of the average range for this time of
year.

Total products supplied over the last four-week period has averaged nearly 18.2
million barrels per day, down by 7.9 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 9.0 million
barrels per day, down by 1.2 percent from the same period last year. Distillate
fuel demand has averaged about 3.5 million barrels per day over the last four
weeks, down by 14.1 percent from the same period last year. Jet fuel demand is
10.3 percent lower over the last four weeks compared to the same
four-week period last year.

[frawin]

IEA Cuts Oil-Demand Outlook as Recession Lingers (Update1)


By Alexander Kwiatkowski

May 14 (Bloomberg) -- The International Energy Agency cut its oil-demand forecast for a ninth consecutive month, predicting consumption this year will fall the most since 1981 as the recession lingers.

The Paris-based adviser to 28 nations cut its global oil demand estimate "slightly" to 83.2 million barrels a day this year, down 3 percent from 2008, it said today in its monthly report. That is 230,000 barrels a day lower than it forecast last month. The revision comes a day after OPEC reduced its 2009 forecast, predicting oil demand of 84.03 million barrels a day.

"Demand continues to look very, very weak," David Fyfe, head of the IEA's oil industry and markets division, said in a phone interview from Paris. "Although there has been a lot of talk about the green shoots of economic recovery, we think it is still a little bit early to be flagging any start of a full blown recovery."

Oil prices have climbed 34 percent this year, trading above $60 in New York this week for the first time in six months on increasing optimism about an economic recovery and record production cuts by the Organization of Petroleum Exporting Countries. Still, U.S. crude stockpiles remain near the highest since 1990 as the recession saps fuel demand. OPEC crude production is beginning to rise as higher prices encourage members to pump more than their quotas.

'Very Weak'

Demand is weakest in the world's most developed nations, where consumption will drop by 5.1 percent this year, the IEA said. The IEA cited "very weak" demand data in April for the U.S., and to a lesser extent, Europe.

Crude inventories in the industrial economies of the Organization for Economic Cooperation and Development are at their highest since 1993, according to Fyfe. Stockpiles were equivalent to 62 days of consumption as of the first quarter of the year, according to the IEA.

Iran's OPEC governor Mohammad Ali Khatibi earlier this week said stock levels representing 52 days of consumption were a "healthy level."

"The forward demand-cover level is very high," Fyfe said. "The market structure is still supportive of a degree of stock- building. It is to do with oil for which there is scant demand at the moment."

'Sustained Weakness'

The energy adviser said it expects consumption in developing economies to contract for the first time since 1994 as China and Russia "continue to exhibit sustained weakness." Demand in these economies will average 38.1 million barrels a day this year, a decline of 0.4 percent, or 140,000 barrels a day compared with 2008.

The IEA demand estimate is based on a forecast that global GDP will shrink 1.4 percent in 2009 and the world economy won't start to markedly recover until 2010 at the earliest, it said. Should the world economy see "strong" economic recovery this year, the IEA's oil demand could be "too pessimistic," according to the group.

"If we get an economic bounce in the second half of the year, demand could be stronger than we are showing," Fyfe said.

Non-OPEC supply will fall by 300,000 barrels a day this year, a second annual decline, to about 50.3 barrels a day. The IEA increased its forecast 50,000 barrels a day compared with last month because of "stable" supply from the North Sea and higher-than-expected Russian output.

Supply from OPEC rose for the first time in eight months in April as members backtracked on production cuts, according to the IEA.

Review Production

OPEC will meet May 28 in Vienna to review production quotas. It agreed in March to keep supply unchanged as members continue to implement reductions agreed last year, totaling 4.2 million barrels a day, to stem plunging prices.

The 11 OPEC nations bound by production quotas pumped 25.8 million barrels of crude oil a day last month, the IEA said, compared with their official Jan. 1 limit of 24.845 million a day. That means the group collectively completed 78 percent of its promised reduction, compared with 83 percent in March, the IEA said.

The IEA's estimate is in line with OPEC's own figure. The producer group said yesterday the 11 members implemented 77 percent of planned output cuts in April, down from 82 percent for March. Production rose to 25.8 million barrels a day, the group said, citing secondary sources.

Compliance

"There is a little bit of leakage vis-à-vis targets from Iran and a little bit from Angola," said Fyfe. "Analysts are saying that with prices moving higher and cohesion fraying at the edges, it might be harder" for the group to reduce production again.

As global consumption weakens, OPEC needs to provide less oil to balance supply and demand. All 12 OPEC members, including Iraq, will need to supply about 27.9 million barrels of crude a day this year, the IEA report showed. That's a reduction of 300,000 barrels a day from last month's assessment.

Those same 12 OPEC members pumped 28.2 million barrels a day in April, 270,000 barrels a day more than the previous month, according to the IEA. Crude output in Saudi Arabia, OPEC's biggest producer, was 7.95 million barrels a day in April, unchanged from March, the IEA said.

--

[frawin]

Crude Oil Futures Fall Amid Speculation Fuel Demand May Decline


By Alexander Kwiatkowski

May 15 (Bloomberg) -- Crude oil fell, retreating from a six-month high of $60 a barrel earlier this week, on concern the global economic recovery may falter, reducing demand for fuel.

Crude futures may decline next week as the global recession saps demand and bolsters U.S. supplies, a Bloomberg News survey of analysts shows. Europe's economy contracted at the fastest pace in at least 13 years in the first quarter, the European Union said today. The International Energy Agency yesterday forecast the biggest contraction in world oil use since 1981.

"It is still a pretty bad demand environment. I can't see prices can go too far up," said Thina Saltvedt, an oil analyst at Nordea Bank AB in Oslo. "The recent rise in prices has been based on optimism."

Crude oil for June delivery fell as much as 45 cents, or 0.8 percent, to $58.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $58.20 at 11:11 a.m. in London. Oil reached $60.08 on May 12, the highest intraday price since Nov. 11.

Prices fell yesterday to a four-day low of $56.55 after the IEA report. It later rebounded to close at $58.62 a barrel as U.S. stocks advanced, following news of a decline in bank borrowing and better-than-estimated company earnings.

Oil also fell today as the dollar strengthened against the euro, reducing the appeal of oil as an inflation hedge for investors. The U.S. currency traded at $1.3557 against the euro at 11:14 a.m. in London from $1.3639 yesterday.

Stock Market Influence

The oil market "is very much influenced by the stock markets and by what is happening with the dollar too," said Robert Montefusco, a broker at Sucden Financial in London.

Gross domestic product in the 16-member euro region dropped 2.5 percent from the fourth quarter, when it fell 1.6 percent, the European Union's statistics office in Luxembourg said today.

That's the biggest drop since the euro-area GDP data were first compiled in 1995, and exceeded the 2 percent decline economists expected in a Bloomberg News survey.

Six respondents to the Bloomberg news survey, or 20 percent, forecast that oil prices will rise and six said the market will be little changed. Last week, 43 percent of analysts said prices would decline.

Oil futures are little changed this week after falling on May 13 as weaker-than-expected retail data in the U.S. caused investors to sell equities. The same day, an Energy Department report showed U.S. crude-oil supplies fell 4.63 million barrels to 370.6 million in the week ended May 8, the first drop since February. Inventories are still 18 percent higher than the five- year average for the week and near the highest level since 1990.

Fuel Consumption

Total U.S. daily fuel demand averaged 18.2 million barrels in the four weeks ended May 8, down 7.9 percent from a year earlier, the Energy Department report showed. Gasoline demand averaged 9 million barrels in the same period, down 1.2 percent from a year earlier.

The IEA cut its 2009 demand estimate to 83.2 million barrels a day, down 3 percent from 2008. That's 230,000 barrels a day less than last month's forecast. OPEC and the U.S. Energy Department reduced their 2009 outlooks this week.

Brent crude oil for July settlement fell as much as 54 cents, or 0.9 percent, to $58.05 a barrel on London's ICE Futures Europe exchange at 11:16 a.m. local time. It rose 47 cents, or 0.8 percent, to $58.59 a barrel yesterday. The June contract expired yesterday and fell 65 cents, or 1.1 percent, to $56.69 a barrel.