Better Fill up today

[frawin]

OPEC Will Wait for $100 Oil Before Raising Output 

By Fiona MacDonald

June 10 (Bloomberg) -- OPEC, the supplier of 40 percent of the world's oil, will only consider increasing output when the price of crude rises to $100 a barrel, according to Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah.

The Organization of Petroleum Exporting Countries, due to meet in September, wouldn't raise production with oil at $75, "but if it reaches $100, maybe," al-Sabah said today in Kuwait.

Crude oil traded in New York has climbed almost 60 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for fuel.

Oil prices have increased because investors have bought crude as a hedge against a weakening U.S. dollar, not because demand is rising, al-Sabah said.

R20;The numbers, in terms of economic recovery, are not in correlation with the rise of oil," he said.

Oil futures rose above $70 a barrel yesterday for the first time since November, and traded at $71.14 as of 8:38 a.m. London time today.

[frawin]

Oil Trades Near Seven-Month High as IEA Raises Demand Forecast



June 11 (Bloomberg) -- Crude oil rose for a third day, climbing above $72 a barrel for the first time in seven months as the International Energy Agency raised its demand forecast and China's net imports jumped to a 14-month high.

The Paris-based adviser to 28 nations increased its global consumption outlook for the first time since August amid signs the recession is "bottoming out." China boosted net crude purchases to 3.9 million barrels a day in May, according to data released on the Web today. Oil also got support from last week's drop of 4.38 million barrel in U.S. stockpiles.

"The IEA report is positive since it confirms that sentiment is changing for the best," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Still, the rally is losing momentum and there's a good chance of a small pull-back as people take profits."

Crude oil for July delivery gained as much as 96 cents, or 1.4 percent, to $72.29 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since Oct. 21 The contract was at $72.29 at 10:09 a.m. London time.

The IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report. The increase was driven by the U.S. and China. Still, consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.

U.S. oil stockpiles dropped to 361.6 million in the week ended June 5, the Energy Department said yesterday. Analysts surveyed by Bloomberg News said supplies would rise by 100,000 barrels. Gasoline inventories slipped for a seventh week.

China's increase in net crude-oil imports in May was second only to a record of 16.9 million tons in March. Imports rose by 5 percent to 17.09 million tons from a year earlier and exports stood at 470,000 tons, up from 150,000 tons last year.

China Investment

China's spending on factories, property and roads surged a more-than-estimated 33 percent from a year earlier, the statistics bureau said today, helping to drive a recovery in the world's third-largest economy and drive up demand for fuel.

U.S. fuel demand in the past four weeks averaged 18.3 million barrels a day, down 6.9 percent from a year earlier, the Energy Department said. There was a 7.7 percent deficit in the week ended May 29. Gasoline use averaged 9.2 million barrels a day during the period, up 0.4 percent from a year ago.

Fuel imports to the U.S. dropped 379,000 barrels a day to 2.55 million, the department said. Crude-oil imports slipped 676,000 barrels to 8.97 million.

Gasoline Stockpiles

Stockpiles of gasoline fell 1.55 million barrels to 201.6 million, the Energy Department report showed. A 750,000-barrel increase was forecast, according to the median of 14 estimates by analysts surveyed before today's report.

"The big news last night was the bigger than expected decline in stockpiles," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "That's somewhat of a fundamental justification for this rally continuing in the short term."

Gasoline supplies last week were 3.9 percent below the five-year average for the period, according to the department. There was a 13 percent surplus in the week ended May 22.

Brent crude for July delivery rose as much as 85 cents, or 1.2 percent, to $71.65 on London's ICE Futures Europe exchange. The contract was at $71.52 a barrel at 10:10 a.m. in London. Yesterday, it settled at $70.80, the highest since Oct. 20.

[Dee Gee]

I suppose this is the reason they raised the gasoline price up 12 cents to 2.69.

[frawin]

Oil Is Little Changed Near 7-Month High on China Growth, IEA


By Ben Sharples

June 12 (Bloomberg) -- Crude oil traded near a seven-month high, poised for a fourth week of gains, after China's industrial output accelerated and the International Energy Agency raised its global demand forecast.

China's industrial production grew 8.9 percent in May, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade. The IEA, adviser to 28 nations, increased its consumption outlook for the first time since August.

"I think the overall picture is certainly stronger for longer and higher over the next couple of months," said Peter McGuire, managing director of Commodity Warrants Australia Pty in Sydney. "I would say $80 to $81 would be the new target."

Crude oil for July delivery was at $72.31 a barrel, down 38 cents, in after-hours trading on the New York Mercantile Exchange at 1:56 p.m. Singapore time. Yesterday, the contract rose $1.35, or 1.9 percent, to $72.68 a barrel, the highest settlement since Oct. 20. Oil is up 5.6 percent this week.

The Paris-based IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report yesterday. The gain was driven by the U.S. and China. Consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.

China's industrial output rose 8.9 percent from a year earlier, the statistics bureau said today, after gaining 7.3 percent in April. That was more than the 7.7 percent median estimate of 16 economists surveyed by Bloomberg News.

'Smart Money'

"The smart money has been in crude for probably the best part of six weeks and longer considering where it has risen since February," McGuire said.

Asian stocks rose for a third day as improved economic indicators pointed to an easing of the U.S. recession and metal prices jumped the most in 10 days. The MSCI Asia Pacific Index gained 0.4 percent to 105.44 as of 9:42 a.m. in Tokyo, bringing its three-day climb to 3 percent.

The Reuters/Jefferies CRB Index of 19 raw materials rose 2 percent to 266.17, the highest since Nov. 5.

The dollar declined against most of its major counterparts after the gain in U.S. retail sales and drop in initial jobless claims encouraged investors to buy higher-yielding assets such as commodities. The dollar traded at $1.4106 versus the euro at 11:45 a.m. in Tokyo, from $1.4108 yesterday in New York, set for a 1 percent decline this week.

Jobless Claims

The number of Americans filing claims for unemployment insurance fell to 601,000, lower than economists had forecast. The number of jobless continuing to collect payments rose to a record for the 19th consecutive time, to 6.82 million, the Labor Department report showed. Retail sales climbed in May for the first time in three months, a separate report showed yesterday.

Gasoline for July delivery dropped 0.74 cents to $2.0575 a gallon at 1:11 p.m. in Singapore. Yesterday, it gained 4.96 cents, or 2.5 percent, to end the session at $2.0649 a gallon in New York. It was the highest settlement since Oct. 3.

China, the world's second-biggest energy consumer, reduced its oil output by 1.1 percent in May as the economy slows, government data showed. Crude production fell to 16.03 million metric tons last month, the National Bureau of Statistics said in an e-mailed statement today.

The IEA's forecast change in demand was countered by expectations for higher output from outside the Organization of Petroleum Exporting Countries. The IEA raised its 2009 estimate for non-OPEC supply by 170,000 barrels a day from May's report because of production growth in Russia and Colombia and improved North Sea performance.

Oil touched a record $147.27 a barrel on July 11 as investors purchased commodities as the dollar dropped and on concern that demand would outpace production.

Brent crude for July delivery was at $71.36 a barrel, down 43 cents, at 1:56 p.m. Singapore. Yesterday, the contract rose 99 cents, or 1.4 percent, to $71.79 on London's ICE Futures Europe exchange, the highest settlement since Oct. 20.

[frawin]

All of the indications are for higher oil as the world economies improve, Clinton created the Chinese energy consuming monster and there is not enough world oil production to feed the ever increasing demand.

Oil Drops After Record Plunge in European Industrial Production

By Grant Smith

June 12 (Bloomberg) -- Oil fell for the first day in four as a record plunge in European industrial production prompted speculation that hopes for an economic recovery are premature.

Oil declined as the U.S. dollar strengthened, undermining investors' need to use commodities as an inflation hedge. The relative strength index for New York oil futures, a measure of how rapidly prices have advanced or dropped during a specific period, indicates prices may fall. U.S. crude inventories remain 11 percent above their five-year average, according to the Energy Department.

R20;The market has excessively priced in the idea that a demand recovery is imminent," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "Upbeat sentiment might drive prices higher in the short term, but later in the summer fundamentals will play a larger role and a massive price correction is likely."

Crude oil for July delivery fell as much as $1.20, or 1.7 percent, to $71.48 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.50 a barrel at 10:52 a.m. London time.

Yesterday, the contract rose $1.35, or 1.9 percent, to $72.68 a barrel, the highest settlement since Oct. 20. Oil is up 5.6 percent this week.

European industrial production dropped by the most on record in April as the worldwide recession ravaged demand for goods. Production in the euro region plunged 21.6 percent from a year earlier, the most since the data series started in 1986, the European Union's statistics office said today. Economists expected a 19.8 percent decline, according to a Bloomberg News survey. From March, output declined 1.9 percent.

R16;Commodities OverboughtR17;

R20;Most commodity markets are still quite overbought, and could be subject to a modest sell-off next week," said Edward Meir, analyst with MF Global Ltd. in Connecticut.

The 14-day relative strength index, or RSI, was at 73.55 today after rising to 76.23 yesterday. Readings above 70 typically warn a price may decline and those below 30 indicate it may rise.

Treasuries rose for a second day and the dollar gained after Japanese Finance Minister Kaoru Yosano said his nation's confidence in U.S. debt is "unshakable" and that the currency's global status is safe. The dollar gained to $1.4043 per euro as of 10:50 a.m. in London.

The Paris-based IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report yesterday. The gain was driven by the U.S. and China. Consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.

China Quickens

ChinaR17;s industrial production growth quickened in May, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade.

ChinaR17;s industrial output rose 8.9 percent from a year earlier, the statistics bureau said today, after gaining 7.3 percent in April. That was more than the 7.7 percent median estimate of 16 economists surveyed by Bloomberg News.

Brent crude for July delivery was at $70.57 a barrel, down $1.22, at 10:53 a.m. London time. Yesterday, the contract rose 99 cents, or 1.4 percent, to $71.79 on LondonR17;s ICE

[frawin]

Oil Falls a Second Day as Stronger Dollar Dulls Hedge Appeal

By Grant Smith

June 15 (Bloomberg) -- Oil fell as the dollar rose the most in a week against the euro, limiting investors' need to use commodities as an inflation hedge.

Crude declined for a second day before a report forecast to show that manufacturing in New York state contracted for a 14th month and as European and Asian equities retreated, compounding speculation that the economic recovery has yet to take hold. Nigerian militants said they destroyed a facility run by Chevron Corp. in the Niger delta area.

"Speculative money has increased oil's sensitivity to dollar movements, and if the dollar continues to strengthen this will weigh on prices," said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. "Unless we see a significant improvement in the fundamentals, we continue to expect a correction from current levels."

Crude oil for July delivery dropped as much as $1.33, or 1.9 percent, to $70.71 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.06 a barrel at 11:12 a.m. in London. Oil reached $73.23 on June 11, the highest in seven months.

"Some of these commodities really have put on some pretty solid gains without really much fundamental basis," said Toby Hassall, research analyst at Commodity Warrants Pty in Sydney. Oil "is vulnerable to some corrective action, especially if we see further strength in the dollar."

Oil Rally, Dollar

New York oil futures have gained 46 percent in the past two months, as the dollar fell 5.6 percent against a basket of six major currencies.

The dollar rose for a second day today, trading 1.2 percent higher at $1.3856 to the euro at 10:46 a.m. London time, from $1.4016 late in New York last week. Russia's Finance Minister Alexei Kudrin said the nation has full confidence in the currency.

The Federal Reserve Bank of New York's general economic index was at minus 4.6, the bank said on May 15. Readings below zero for the Empire State index signal manufacturing activity is shrinking. The U.S. unemployment rate hit a 25-year high of 9.4 percent as of May.

Brent crude for July delivery fell as much as $1.17, or 1.7 percent, to $69.75 a barrel on London's ICE Futures Europe exchange. The contract expires today.

The more actively traded August contract declined as much as $1.17, or 1.6 percent, to $70.63 a barrel.

Nigeria Rebels

Rebels in Nigeria, Africa's biggest oil producer and the sixth-largest in OPEC, blew up two oil wells and pipelines at the Chevron Corp.-operated Makaraba field, the Movement for the Emancipation of the Niger Delta said yesterday.

Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended June 9, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 47,883 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose 8,196 contracts, or 21 percent, from a week earlier.



Last Updated: June 15, 2009 06:14 EDT

[frawin]

Crude Oil Advances in New York Before U.S. Inventory Report

By Grant Smith

June 16 (Bloomberg) -- Crude oil rose for the first time in three days as the dollar weakened against the euro and before a report on stockpiles in the U.S.

The U.S. Energy Department will probably say tomorrow that crude stockpiles dropped 2 million barrels last week, according to a Bloomberg survey. Oil lost 2 percent yesterday, extending its decline from last week's seven-month high of $73.23 a barrel as a stronger dollar made commodities less appealing as a currency hedge.

"The pullback in the dollar is supporting all commodities," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Sentiment remains positive, but it's likely the market will consolidate ahead of the U.S. inventory data tomorrow."

Crude oil for July delivery rose as much as $1.50, or 2.1 percent, to $72.12 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $72.06 as of 11:37 a.m. London time.

U.S. Crude oil supplies probably dropped as refiners ramped up production and boosted stockpiles of gasoline and heating oil, a Bloomberg News survey showed. Inventories are 11 percent above the five-year average for this time of year.

Gasoline supplies probably rose 550,000 barrels in the week ended June 12 from 201.6 million the previous week. All of those surveyed said supplies climbed. Stockpiles during the same week last year fell 1.2 million barrels amid the peak motor fuel demand season in the U.S.

Brent Crude

Brent crude for August delivery rose as much as $1.34, or 1.9 percent, to $71.58 a barrel on London's ICE Futures Europe exchange. Yesterday the contract lost $1.56, or 2.2 percent, to $70.24 a barrel.

Iranian opposition supporters plan a fourth day of protests in Tehran against President Mahmoud Ahmadinejad's re-election, after seven people were killed in violence at a rally in the capital yesterday. Iran is the world's fourth-largest crude oil producer.

"For the time being, the Iranian situation seems to be neutral," said Edward Meir, analyst with MF Global Ltd. in Connecticut. "Although the oil markets were unimpressed by the frenzied weekend developments," events seem "to have picked up a gear over the past 24 hours, in that the size of the opposition protests have become significantly larger."

The U.S. dollar dropped for the first day in three against the single European currency, losing 0.7 percent to $1.3875 as of 11:06 a.m. London time. Declines in the U.S. currency heighten the appeal of dollar-priced assets that can be used to hedge against inflation, such as crude.



Last Updated: June 16, 2009 06:39 EDT

[frawin]

Oil Falls as Equity Drop Sparks Concern Over Economic Recovery

By Grant Smith

June 17 (Bloomberg) -- Crude oil fell for a fourth day, its longest losing streak since February, as prices tracked declines in global equities on speculation that an economic recovery has yet to take hold.

Oil fell as the dollar pared losses, dimming the usefulness of commodities as an inflation hedge. Royal Dutch Shell Plc said Nigerian shipments will be disrupted for a fifth month in July as violence escalates in Africa's largest oil producer. U.S. crude stockpiles dropped 2 million barrels last week, according to a survey before the Energy Department weekly report today.

"The market is being driven by the dollar yet again, and we're seeing a pullback in equities today that is reducing some of the risk appetite behind the recent rally," said Andrey Kryuchenkov, analyst at VTGB Capital in London. "Prices are likely to hold until we get the inventory data."

Crude oil for July delivery traded for $70.14 a barrel, 33 cents lower, on the New York Mercantile Exchange at 10:40 a.m. London time, after falling as low as $69.91. The contract rose to a seven-month high of $73.23 on June 11.

Shell suspended export obligations on crude exports from the Forcados terminal in Nigeria to cover the remaining loading program for June and July, company spokesman Precious Okolobo said by phone from Lagos today. Militant attacks have cut Nigeria's oil exports by more than 20 percent since 2006.

Yesterday the industry-funded American Petroleum Institute said U.S. crude inventories fell 1.26 million barrels to 356.6 million barrels last week.

Growing Gasoline Stockpiles

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.

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

Gasoline supplies probably rose 550,000 barrels in the week ended June 12 from 201.6 million the previous week. Nine of 11 analysts surveyed said supplies climbed. Stockpiles during the same week last year fell 1.2 million barrels amid the peak motor-fuel demand season in the U.S.

"Investors may be sensing that many markets have done enough on the upside in recent months," said Edward Meir, an analyst with MF Global Ltd. in Connecticut. "Of course, hanging over the markets is the unsettled Iranian situation."

A disputed result in last week's presidential elections has prompted the largest anti-government demonstrations since the 1979 revolution in Iran, second-largest producer in the Organization of Petroleum Exporting Countries, to recover from the recession.

The Dow Jones Stoxx 600 Index of European shares slid 1.1 percent at 10 a.m. in London after a three-month, 36 percent rally that drove price-earnings valuations to the highest levels in five years.

The dollar was 0.2 percent weaker against the euro at $1.3873 as of 11:01 a.m. London time, recovering from an earlier low of $1.3928. Declines in the U.S. currency make dollar-priced commodities such as crude more useful as a hedge against inflation.

Brent crude for August settlement was at $70.15 a barrel, 9 cents lower, on London's ICE Futures Europe exchange at 11:05 a.m. London time.

[frawin]

Oil Rises a Second Day After Nigerian Militants Attack Pipeline



By Grant Smith

June 18 (Bloomberg) -- Crude oil rose for a second day in New York after militants attacked a pipeline in Nigeria, Africa's largest producer.

A "major" delivery line to Royal Dutch Shell Plc's Forcados terminal was breached using high explosives yesterday, the Movement for the Emancipation of the Niger Delta said in a statement. U.S. crude stockpiles fell a more than-estimated 3.87 million barrels last week to 357.7 million, the Energy Department said yesterday.

"The supply side will become more important in the next few months as fundamentals improve, and things like Nigeria will be important again," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.

Crude oil for July delivery climbed as much as 70 cents, or 1 percent, to $71.73 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $71.38 at 11:24 a.m. London time. Prices are up 60 percent this year, having reached a seven-month high of $73.23 on June 11.

Oil may decline to as low as $50 a barrel in two months because there are no signs that world demand is recovering, according to Societe Generale SA's Paris-based head of commodities research.

"Down the road, it is likely that we see a sharp downward correction in the market because recent rallies look very fragile," Frederic Lasserre, an oil analyst at France's second- largest bank, told reporters in Tokyo.

While there is some short-term "liquidation risk" in oil markets, Goldman Sachs Group Inc. analysts said they expect "an improvement in fundamentals to begin to take hold in the next several months," pushing prices to $85 a barrel before the end of the year.

Improving Outlook

"The rise in long-dated prices has largely been driven by an improving forward fundamental outlook, in line with better global leading economic indicators," Goldman analysts including London-based Jeff Currie wrote in a report dated yesterday.

Nigerian militants blew up a delivery line that carries crude oil from the Tunu, Opukusu and Ugbotubu flow stations in Bayelsa state at 8:30 p.m. local time, according to the statement from Jomo Gbomo, a spokesman for MEND. Shell said it's investigating the claims.

"If there is a significant enough disruption, that could flow through to the fundamentals and support the price," said Toby Hassall, an analyst with Commodity Warrants Australia Ltd. in Sydney.

Brent crude for August settlement gained as much as 64 cents, or 0.9 percent, to $71.49 a barrel on London's ICE Futures Europe exchange.

U.S. gasoline inventories climbed 3.39 million barrels to 205 million last week, the biggest gain since January, the Energy Department's report showed. Gasoline use increased 213,000 barrels a day to 9.35 million.

--

[frawin]

Oil May Fall on Fuel Supply Gain, Lower Demand, Survey Shows


By Mark Shenk

June 19 (Bloomberg) -- Crude oil futures may fall on speculation U.S. fuel stockpiles will increase as the recession and rising prices sap consumption.

Fourteen of 32 analysts surveyed by Bloomberg News, or 44 percent, said futures will decline through June 26. Thirteen respondents, or 41 percent, forecast that the market will be little changed and five said prices will climb. Last week, 49 percent of analysts said oil would increase.

Gasoline inventories climbed 3.39 million barrels to 205 million last week, the biggest gain since January, an Energy Department report on June 17 showed. Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended June 12, down 6 percent from a year earlier, the report showed.

"The crude oil market has become well overvalued given the high level of inventory and relatively weak recessionary demand," said Tim Evans, an energy analyst with Citi Futures Perspective in New York. "It may be vulnerable to any downward correction in the equity markets or any sustained recovery in the U.S. dollar as well."

Oil futures have climbed 60 percent this year as the U.S. stock market rebounded and the dollar dropped against most of its major counterparts, spurring investors to purchase energy futures and other commodities.

Crude oil for July delivery fell 67 cents, or 0.9 percent, to $71.37 a barrel so far this week on the New York Mercantile Exchange. Prices have dropped 52 percent from the record $147.27 a barrel reached on July 11.

The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.



     Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:

                    RISE      NEUTRAL    FALL
                     5          13        14


Last Updated: June 19, 2009 00:00 EDT