Better Fill up today

[frawin]

Crude and Natural Gas are both trading higher this morning, crude has traded a larger than usual volume over night.

Oil Rises for First Day in Four on Forecast of U.S. Supply Drop

By Grant Smith and Yee Kai Pin

July 15 (Bloomberg) -- Crude oil rose for the first day in four before a report forecast to show that U.S. crude-oil inventories contracted for a fifth week.

Oil climbed from an eight-week low as equity markets in Asia and Europe advanced, raising optimism about an economic rebound. The U.S. Energy Department will probably say crude supplies fell 2.1 million barrels last week, according to a Bloomberg survey. Yesterday, the industry-funded American Petroleum Institute said gasoline inventories fell for the first time in six weeks.

"People are pricing in a positive result from this afternoon's data after the API," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "We also have the combination of equities being higher today, and the dollar weaker."

Crude oil for August delivery gained as much as $1.17, or 2 percent, to $60.69 a barrel on the New York Mercantile Exchange. The contract traded at $60.44 at 1:09 a.m. London time. Yesterday, it declined to $59.52, the lowest settlement since May 18.

Nigeria's main rebel group, the Movement for the Emancipation of the Niger Delta, declared a 60-day cease-fire in its local campaign targeting oil and gas installations after authorities freed leader Henry Okah. The cease-fire came into force at midnight local time.

The MSCI World Index climbed 0.9 percent at 12:23 p.m. in London, its third day of gains. Futures on the Standard & Poor's 500 Index increased 1 percent.

Demand Growth

"We are starting to see index-fund buying on the loose connection between higher equities and an assumption that oil demand will grow," Peter Beutel, president of Cameron Hanover in New Canaan, Connecticut, said in a note to clients.

A report today from the Energy Department may show that crude supplies fell 2.1 million barrels in the week ended July 10 from 347.3 million the previous week, according to the median of 14 estimates by analysts.

The report will probably show gasoline inventories rose 875,000 barrels in the week ended July 10. The department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington.

"The expectation is that U.S. gasoline demand has been weak post-July 4," said Victor Shum, a senior principal at consultant Purvin & Gertz Inc. in Singapore. "Traders would treat the API report with some caution."

Distillate Stocks

Stocks of distillate fuel, a category that includes diesel and heating oil, probably rose 2 million barrels last week, the survey showed. Distillate fuel inventories increased 3.74 million barrels to 158.7 million in the week ended July 3, the highest since January 1985, according to the department.

Yesterday, the API said that crude inventories fell 1.6 million barrels to 346.8 million last week. The API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines.

Brent crude for August settlement rose as much as $1.26, or 2.1 percent, to $62.12 on London's ICE Futures Europe Exchange, and traded at $62.05 at 1:10 p.m. London time. The contract expires tomorrow.

[larryJ]

Cease fires are good as long they stick to the agreement.  Hopefully they will and production will improve in Nigeria.


Larryj

[frawin]

I agree Larry, but these factions have been fighting each other a longtime. Nigeria is a very important factor in our Sweet "Gasoline" Crude supply. I am hoping that the Nigerian Government will work with the rebels some to keep all of the pipelines and terminals open. I have been to all of the Nigerian main terminals and there is no way to keep the Rebels from sabotaging the lines coming in.

[frawin]

Crude Oil Declines From Highest in a Week as Equities Retreat



By Grant Smith

July 16 (Bloomberg) -- Crude oil fell from its highest in a week as equity markets in Europe pared earlier gains, reinforcing concerns that the economic recovery remains elusive.

Oil dropped as stocks slid after commercial lender CIT Group Inc. said it won't get a federal bailout. U.S. gasoline and heating oil supplies increased last week as the recession stifles demand, a government report showed yesterday. China's gross domestic product grew 7.9 percent in the second quarter.

"The market doesn't know which direction it should go," said Andy Sommer, an analyst at Elektrizitaets-Gesellschaft Laufenburg in Dietikon, Switzerland. "The Asian countries are coming out of the worst. But warning voices persist that growth is not stable yet."

Crude oil for August delivery fell as much as 79 cents, or 1.3 percent, to $60.75 a barrel on the New York Mercantile Exchange, trading for $60.87 at 10:40 a.m. in London.

Prices, which have increased 37 percent this year, jumped 3.4 percent yesterday to $61.54, the highest close since July 7.

China overtook Japan as the world's second-largest stock market by value for the first time in 18 months, as government spending and record bank lending boosted share prices. China's industrial production increased 10.7 percent in June from a year earlier, the largest gain in nine months excluding seasonal distortions. Retail sales climbed 15 percent.

'Revive Demand'

"This will revive demand growth we saw in China last year, especially with better-than-expected automobile sales in the first half of this year," said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong.

U.S. crude inventories fell 2.81 million barrels to 344.5 million last week, the Energy Department said yesterday.

"The huge rally across the board in equities helped boost crude oil," said Mike Sander, an investment adviser with Sander Capital in Seattle. "The weekly EIA report showed a drop in crude oil inventories by 2.8 million barrels, which lent support to higher crude prices as well."

Crude stockpiles were forecast to decline 2.1 million barrels, according to analysts surveyed by Bloomberg News. Refineries operated at 87.9 percent of capacity, the highest since August.

Gasoline inventories climbed 1.44 million barrels to 214.6 million, the highest since April, the Energy Department report showed. Supplies were forecast to increase 875,000 barrels.

Distillate Fuel

Supplies of distillate fuel increased 553,000 barrels to 159.3 million in the week ended July 10, the highest since January 1985, the report showed.

Brent crude for August settlement was at $62.18 a barrel, down 91 cents, on London's ICE Futures Europe Exchange at 10:44 a.m. in London. The more-actively traded contract for September, which becomes the front month tomorrow, slipped 78 cents to $62.74.

Oil will collapse to $20 a barrel this year as the recession takes a deeper toll on fuel demand, according to academic and former U.S. government adviser Philip Verleger.

A crude surplus of 100 million barrels will accumulate by the end of the year, straining global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.



Last Updated: July 16, 2009 05:50 EDT

[frawin]

Crude Oil Falls as Stronger Dollar Limits Commodity Investments 

By Grant Smith and Christian Schmollinger

July 17 (Bloomberg) -- Crude oil fell in New York for the first time in three days as the dollar rose against the euro, limiting the appeal of commodities as an investment.

The dollar climbed as investors sought safer assets amid speculation that CIT Group Inc. will file for bankruptcy, and after two explosions killed at least nine people at hotels in the Indonesian capital of Jakarta. Fuel demand in the U.S., the world's largest oil user, fell the most in the first six months to an 11-year low as the global recession curbed shipping and air traffic, the American Petroleum Institute said yesterday.

"Oil is on shaky ground," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Fundamentals are bearish in the near term, with demand in the product market depressed. It's going to take dollar weakness and better macro data to restart the uptrend."

Crude oil for August delivery fell as much as 52 cents, or 0.8 percent, to $61.50 a barrel on the New York Mercantile Exchange. It was at $61.81 a barrel at 9:31 a.m. London time. It rose as much as 0.5 percent to $62.35 a barrel.

Crude is up 2.8 percent this week, set for its first weekly gain since June 12.

Bombs tore through the Ritz Carlton and JW Marriott hotels in Jakarta, killing at least nine people and injuring 42 others in Indonesia's first terrorist attack since 2005.

Investors sought safer assets after the blasts including the dollar and the yen. The U.S. currency gained to $1.4089 per euro from $1.4148.

Product Deliveries Fall

Deliveries of petroleum products, a measure of consumption, declined 5.8 percent to an average 18.7 million barrels a day from January through June, the API said yesterday in a report. Demand is down 9.6 percent from a record 20.75 million barrels a day in the first half of 2005.

Gasoline inventories climbed 1.44 million barrels to 214.6 million, the Energy Department report showed. Supplies were forecast to increase 875,000 barrels.

"We saw yet another increase in gasoline stockpiles, which is obviously pretty concerning," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "There's not too much of a bullish story out there."

Brent crude for September settlement fell as much as 58 cents, or 0.9 percent, to $63.17 a barrel on London's ICE Futures Europe Exchange. It was at $63.37 a barrel at 9:30 a.m. London time.

The August future expired yesterday, ending the day down 34 cents, or 0.5 percent, at $62.75 a barrel.

China, OPEC

China, the largest energy user after the U.S., processed a record volume of crude oil in June as faster economic growth boosted fuel demand and refining profits encouraged production.

Oil processing rose for a fifth month to 31.9 million metric tons last month, or about 7.76 million barrels a day, China Mainland Marketing Research Co., which compiles data for the government, said in a statement today.

The country reported yesterday that its second quarter gross domestic product increased 7.9 percent.

OPEC will trim shipments by 0.8 percent in the four weeks ending Aug. 1, while still failing to meet its supply quotas seven months after they were set, according to consultant Oil Movements.

The Organization of Petroleum Exporting Countries will reduce exports in the four-week period to 22.55 million barrels a day from 22.74 million a day in the month ended July 4, the tanker-tracker said today. It's the fifth consecutive monthly drop reported in Oil Movements' weekly reports.

Last Updated: July 17, 2009 05:03 EDT

[frawin]

Oil Rises to Two-Week High as Chinese Refiners Signal Rebound


By Grant Smith and Christian Schmollinger

July 20 (Bloomberg) -- Crude oil rose to its highest in nearly two weeks, buoyed by equity markets and signs that energy demand in China is rebounding.

Oil advanced for a fourth day as European and Asian stock markets gained, led by commodity and technology shares. Refiners in China, the world's second-largest oil user, raised their operating rates for an eighth week to 85.1 percent on July 16, said CBI China, a Shanghai-based commodities researcher.

"China has been one of the few bright spots in the outlook for oil demand lately," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "I think we could see funds return to the market and take another run at $70 a barrel."

Crude oil for August delivery rose as much as $1.34, or 2.1 percent, to $64.90 a barrel in electronic trading on the New York Mercantile Exchange. Prices were at $64.75 at 11:54 a.m. London time. Oil has gained 45 percent this year.

The August contract expires tomorrow. The more-widely held September contract climbed as much as $1.32, or 2 percent, to $65.83 a barrel at 11:44 a.m. in London.

Oil prices gained 6.1 percent last week, helped by rising equity markets and a rebound in U.S. housing starts.

The MSCI World Index advanced 0.2 percent as of 11:45 a.m. in London. The gauge of 23 developed nations surged 6.6 percent last week, the biggest rally in four months, after U.S. companies from Goldman Sachs Group Inc. to Johnson & Johnson reported earnings that beat analysts' estimates.

Weaker Dollar

Oil was also supported as the U.S. currency weakened, boosting the investment appeal of dollar-denominated commodities. The dollar fell as low as $1.4229 to the euro, the weakest since June 5.

"This is all related to investors' risk appetite," said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. "When that increases, stocks and commodities tend to do well and the dollar gets weaker."

Brent crude for September settlement gained as much as $1.32, or 2 percent, to $66.70 a barrel on London's ICE Futures Europe Exchange. The contract traded at $66.55 a barrel at 11:46 a.m.

Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended July 14, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 16,157 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 800 contracts, or 5 percent, from a week earlier.



Last Updated: July 20, 2009 06:56 EDT

[frawin]

Oil Is Little Changed on Forecast for Rising Gasoline Supplies



By Grant Smith

July 21 (Bloomberg) -- Crude oil traded little changed around $64 a barrel in New York before a report forecast to show that gasoline supplies expanded in the U.S.

Gasoline inventories in the world's largest energy market probably rose by 850,000 barrels from 214.6 million barrels, a Bloomberg survey showed. That would be the sixth week of gains during what is typically peak time for demand. Stockpiles of crude likely fell for a 10th week out of 11, the survey showed.

"We haven't yet seen the optimism materialize in increased consumption of oil," said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. "Better than expected macro indicators are keeping hopes up, but we need to see some improvement in demand."

Crude oil for August delivery was at $64.21 a barrel, 36 cents higher on the New York Mercantile Exchange at 11:18 a.m. London time. Oil has fallen 12 percent from an eight-month closing high of $72.68 on June 11.

The August contract expires today. The more-active September contract fell as much as 76 cents, or 1.2 percent, to $64.53 a barrel.

U.S. crude oil stockpiles probably declined by 2.25 million barrels in the week ended July 17, according to the median of 12 estimates by analysts before an Energy Department report scheduled for 10:30 a.m. tomorrow in Washington.

Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose by 1.5 million barrels from 159.3 million.

Equity-Driven Rally

"We may be recovering and we may have sequential changes that are positive, but year-on-year levels of activity are showing wide output gaps," Harry Tchilinguirian, a senior oil markets analyst at BNP Paribas, said in a Bloomberg Television interview. "You have to stop and think if the rally we've been having, of course equity-driven, is going to be sustainable."

Refiners in China, the world's largest energy consumer after the U.S., increased operating rates for an eighth week to 85.1 percent of capacity on July 16, said CBI China, a Shanghai- based commodities researcher.

Brent crude for September settlement rose 0.3 percent to $66.61 a barrel on London's ICE Futures Europe Exchange at 11:18 a.m. local time.

[frawin]

Oil Falls After Industry Report Shows Gain in Crude Inventories



By Grant Smith and Christian Schmollinger

July 22 (Bloomberg) -- Oil fell for the first time in six days after an industry report showed crude supplies gained in the U.S., the largest energy user.

U.S. stockpiles rose last week for the first time since April, the American Petroleum Institute reported late yesterday. The Energy Department will release its own supply report later today. Oil imports by China, the world's second-largest consumer, fell 2.8 percent in June from May, customs data showed.

"The market is showing anxiety about U.S. inventories of crude and products today," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "With a lack of support from the dollar or new rally in equities, we think a short-term pullback is the most likely direction."

Crude oil for September delivery dropped as much as $1.19, or 1.8 percent, to $64.42 a barrel on the New York Mercantile Exchange, and was at $64.81 at 11:13 a.m. London time. The August contract expired at $64.72 a barrel yesterday.

Crude prices climbed 8.7 percent from July 14 to July 21 as investors bought futures on expectations of higher fuel demand. Optimism that the worst of the global recession is over followed gains in U.S. leading economic indicators and improved earnings among financial service companies.

China's crude imports in June fell to 16.6 million tons, or about 4.1 million barrels a day, from 17.1 million tons in May, the customs data showed.

'Weak Fundamentals'

U.S. crude supplies climbed 3.1 million barrels to 349.9 million barrels in the week ending July 17, the API said. Inventories of gasoline rose 1.3 million barrels to 213.6 million, the API report said. The group also reported that refinery utilization fell to 84 percent of capacity from 86 percent.

The Energy Department is scheduled to release its Weekly Petroleum Status Report today at 10:30 a.m. in Washington. Oil- supply figures from the institute and the Energy Department moved in the same direction for the past six weeks and 76 percent of the time in the past four years, according to data compiled by Bloomberg.

Crude inventories declined 2.1 million barrels in the week ended July 17, according to the median of 15 estimates by analysts before the report. The Energy Department is expected to say supplies increased by 650,000 barrels, according to the analyst survey.

U.S. stockpiles of distillate fuel, a category that includes diesel and heating oil, probably rose 1.5 million barrels, according to the analyst survey.

Brent crude for September settlement fell as much as 89 cents, or 1.3 percent, to $65.98 a barrel, on London's ICE Futures Europe Exchange. It was at $66.40 a barrel at 11:14 a.m. London time.
Last Updated: July 22, 2009 06:16 EDT

[frawin]

Crude Oil Is Little Changed as U.S. Fuel Inventories Increase



By Grant Smith and Yee Kai Pin

July 23 (Bloomberg) -- Crude oil was little changed around $65 a barrel in New York as rising U.S. fuel inventories dampened optimism in a swift rebound in demand.

Gasoline and distillate fuel inventories in the U.S. gained for a sixth week in the week to July 17, while crude supplies fell, according to an Energy Department report yesterday. Japan's oil imports fell for an eighth month in June. The MSCI World Index of equities rose for a ninth day, its longest winning streak since 2003.

"Demand is weak, and spare capacity is the largest it's ever been," said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. "The market is pricing in a demand recovery round the corner, but I don't see it. We see more of an L-shaped recovery, with more job losses to come."

Crude oil for September delivery on the New York Mercantile Exchange traded up 5 cents at $65.45 a barrel at 10:14 a.m. in London. Prices are down 11 percent from an eight-month high of $73.38 a barrel reached on June 30.

Japan's oil imports fell 19.1 percent in June, according to a preliminary finance ministry trade report. The country's refiners and power utilities maintained output cuts amid the recession, which has reduced demand from the world's second- largest economy.

"We do have more supply than demand given what's happening with the global economy," Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said in a Bloomberg Television interview. "It's going to be a little bit difficult for oil to trade onwards and upwards for the time being."

Asian Equities Gain

The MSCI World rose 0.1 percent as of 8:18 a.m. in London, a ninth straight day of gains. The gauge of 23 developed nations has climbed 9.2 percent since July 10 after better-than- estimated results from companies including Goldman Sachs Group Inc., Johnson & Johnson and Apple Inc.

U.S. crude stockpiles dropped 1.8 million barrels to 342.7 million, the Energy Department also said in its Weekly Petroleum Status Report. This was less than a median 2.1 million-barrel decrease forecast by 15 estimates in a Bloomberg News survey. Gasoline supplies climbed 813,000 barrels to 215.4 million barrels, the highest since mid-April.

"Supplies are more than adequate given the lack of apparent demand," Stephen Schork, president of Villanova, Pennsylvania-based consultant Schork Group Inc., said in a note to clients. "Current draws are not demand driven, but rather a function of lower domestic production and fewer imports."

Brent crude for September settlement on London's ICE Futures Europe exchange traded at $67.34 a barrel, up 13 cents, at 9:26 a.m. in London.


Last Updated: July 23, 2009 05:20 EDT

[frawin]

Oil Set for Second Weekly Gain as Equities Boost Recovery Hopes


By Grant Smith

July 24 (Bloomberg) -- Crude oil traded little changed, heading for its second weekly gain, as advancing equity markets restored faith in the prospect of an economic recovery.

Oil is set for a 5.2 percent gain this week. The Standard & Poor's 500 Index has recovered 50 percent of the losses suffered after the September collapse of Lehman Brothers Holdings Inc. as a record number of companies beat analysts' earnings estimates. German business confidence rose for a fourth month July.

"If the global destruction of the economy has indeed bottomed then so should the oil markets," said Olivier Jakob, managing director of consultants Petromatrix GmbH in Zug, Switzerland. "The green shoots in macro inputs have not been invalidated by earnings reports."

Crude oil for September delivery traded for $67.01 a barrel, 15 cents lower in electronic trading on the New York Mercantile Exchange as of 1:07 p.m. London time.

Oil has increasingly moved in tandem with benchmark stock indexes. The Dow Jones Industrial Average and U.S. crude futures showed a correlation of 0.7 the past month, up from 0.06 in December, according to data compiled by Bloomberg. A correlation of 1 means the two moved in lockstep.

"The surge in oil prices has certainly been driven by equities," said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. "Some of the corporate earnings from the U.S. were pretty good. There are still many to come."

Weak Fundamentals

Fuel consumption is still weak in the oil market, analysts said. U.S. gasoline and distillate fuel inventories climbed for a sixth week, the Energy Department said July 22, signaling demand in the world's largest energy user has been slow to rebound.

"With oil prices close to $70 but products inventories in the U.S. growing week on week, the risk of a price correction, as what we saw at the start of July, is growing," Shum said.

The Organization of Petroleum Exporting Countries will trim crude shipments by 1.7 percent in the four weeks ending Aug. 8, according to consultant Oil Movements, as refinery maintenance and faltering demand encourage members to implement supply cuts.

OPEC, a 12-member group that pumps 40 percent of the world's oil, will reduce seaborne exports in the four-week period to 22.39 million barrels a day from 22.78 million a day in the month ended July 11, the tanker-tracker said today. It's the sixth consecutive drop reported in Oil Movements' weekly reports.

Brent crude for September settlement on London's ICE Futures Europe exchange traded 21 cents lower at $69.04 a barrel at 1:08 p.m. London time.


Last Updated: July 24, 2009 08:18 EDT