Better Fill up today

[frawin]

Oil Rises to 3-Week High as Equities Signal Economic Recovery



By Grant Smith and Christian Schmollinger

July 27 (Bloomberg) -- Crude oil rose to the highest in more than three weeks on expectations that equity markets are signaling a global economic recovery that will spur fuel demand.

Oil was also lifted as the dollar traded near a seven-week low against the euro, increasing commodities' appeal as a hedge against inflation. The MSCI World Index of equities advanced for an 11th day, the longest winning streak since June 2003.

"The key influences for crude right now are equities, technical buying and support from the dollar," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Oil has been riding a wave of positive sentiment, but after all these gains, it's time to consolidate."

Crude oil for September delivery gained as much as 94 cents, or 1.4 percent, to $68.99 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest intraday price since July 2. Futures were at $68.70 a barrel at 10:30 a.m. in London.

Oil last week posted its biggest weekly gain since May and followed a 6.1 percent increase the week before, when U.S. equities climbed 7 percent.

The dollar traded at $1.4245 per euro as of 9:48 a.m. in London, weakening from $1.4202 in New York on July 24. It touched $1.4291 on July 23, the lowest level since June 3.

Oil has moved in tandem with benchmark stock indexes. The MSCI Asia-Pacific Index and U.S. crude futures showed a correlation of 0.5 in the past month, compared with -0.1 a month earlier, according to data compiled by Bloomberg. A correlation of 1 means the two moved in lockstep.

Limited Gains

Crude's gains may be limited as inventories of gasoline and diesel fuel in the U.S., the world's biggest oil user, have climbed, said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne.

Gasoline inventories climbed 813,000 barrels to 215.4 million in the week to July 17, the sixth straight gain, according to an Energy Department report on July 22. Stockpiles of distillate fuel rose 1.22 million barrels to 160.5 million, the highest since January 1985.

"Although crude inventories are falling, it's just going into gasoline supplies, and we haven't seen much evidence of the summer driving season," said Westmore. "Eventually these fundamentals will correct and you see that in these gasoline and distillate inventories getting drawn down."

Brent crude oil for September settlement rose as much as 96 cents, or 1.4 percent, to $71.28 a barrel, and traded at $70.98 on London's ICE Futures Europe exchange at 9:50 a.m. London time. The contract rose 1.6 percent to $70.32 on July 24, the highest settlement since June 29.

Speculators' net-long positions in New York oil, the difference between contracts to buy and sell the commodity, plunged 86 percent in the week ended July 21, the U.S. Commodity Futures Trading Commission reported.


Last Updated: July 27, 2009 05:34 EDT

[frawin]

Oil Is Little Changed Near Three-Week High as Dollar Weakens



By Grant Smith and Christian Schmollinger

July 28 (Bloomberg) -- Crude oil traded little changed near a three-week high in New York as the dollar fell to its lowest level this year, making oil more attractive as a currency hedge.

The U.S. Energy Department will probably say that crude inventories declined for an eighth week, according to a Bloomberg survey before the department's report tomorrow. The Commerce Department yesterday reported U.S. new-home sales climbed the most in eight years in June, a sign the deepest housing slump since the Great Depression is starting to stabilize.

"If there's a weaker dollar, there's more risk appetite," said Amrita Sen, analyst at Barclays Capital in London. "But the move back up in prices has been about a lot of macro optimism, and demand looking better in the non-OECD."

Crude oil for September delivery traded at $68.45 a barrel, up 7 cents, in electronic trading on the New York Mercantile Exchange at 10:35 a.m. London time. Yesterday, it rose as high as $68.99, the highest since July 2. Oil has gained 54 percent this year.

Brent crude oil for September settlement traded at $71.11 a barrel, up 30 cents, on London's ICE Futures Europe exchange.

European and Asian stocks rose, advancing the MSCI World Index for a 12th day, after earnings beat analysts' estimates. The Dollar Index, tracking the dollar against currencies including the yen, pound and Swedish krona, fell to 78.315 today, the lowest level since Dec. 18.

Equities Rise

"The surge in equities over the last two weeks has been the prime driver for the move in crude from $58 to $68 over the same time period," said Mike Sander, an investment adviser with Sander Capital in Seattle.

China's oil consumption will rebound "gradually" in the second half of this year along with an economic recovery, the China Petroleum and Chemical Industry Association said today.

U.S. crude oil supplies probably fell 1.6 million barrels last week from 342.7 million, according to the median of seven estimates by analysts before an Energy Department report tomorrow. Four of those surveyed said supplies dropped, and three forecast an increase.

Gasoline inventories probably declined 650,000 barrels from 215.4 million, according to the median forecast in the survey.

Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 160.5 million. Six out of the seven respondents forecast a gain.

The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. tomorrow in Washington.

"It's still a sideways market right now," said Clarence Chu, a trader with crude oil options dealer Hudson Capital Energy in Singapore. "The fundamentals don't support oil at $70. It looks like we're heading there but very slowly."



Last Updated: July 28, 2009 05:47 EDT

[frawin]

Front month September crude settled at $67.23, down $1.15 on the day, the crude inventories come out tomorrow and the market is anticipating  demand being off again. Front month August Natural Gas settled at $3.535 down $0.069 on the day.

[frawin]

September crude is trading down this morning at $65.775, down $1.455, September Natural Gas is trading at $3.66 down $0.027.



Oil Declines a Second Day as API Report Shows Rising Stockpiles


By Grant Smith

July 29 (Bloomberg) -- Oil fell for a second day after an industry report showed increasing crude supplies in the U.S., the world's biggest energy consumer.

Crude inventories rose 4.07 million barrels last week, the industry-funded American Petroleum Institute reported late yesterday. The Energy Department will release its report later today. Oil extended losses as Asian and U.S. stocks declined after a measure of consumer confidence fell short of projections.

"The build in crude stocks is a reminder of how poor the demand fundamentals are," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "It's unlikely the market will hold above $70 a barrel in the near future, especially as this would undermine the fragile economic recovery."

Crude oil for September delivery fell as much as $1.85, or 2.8 percent, to $65.38 a barrel on the New York Mercantile Exchange, and traded at $65.62 at 11:06 a.m. in London. Oil is poised for its biggest daily decline since July 8 after gaining 48 percent this year.

U.S. crude oil inventories climbed to 352.4 million last week, according to the API. Gasoline inventories were little changed at 213.6 million barrels, the data showed.

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

The Energy Department report today will probably show crude oil inventories dropped 1.5 million barrels last week, according to a Bloomberg News survey.

Getting Expensive

Asian stocks dropped for the first time in 12 days as lower commodity prices and disappointing profit reports raised concern that equities have become expensive relative to earnings prospects. China's Shanghai Composite slumped 5 percent from its highest level in 17 months.

The Standard & Poor's 500 Index dropped 0.3 percent in New York from an eight-month high. The Conference Board's confidence index tumbled to 46.6 from 49.3 in June, a report from the New York-based group showed yesterday.

"The disappointing consumer confidence reading was a bit of a setback for oil," said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. "The strength we've seen lately has really been built on economic optimism and sentiment, rather than fundamentals."

Brent crude oil for September settlement on London's ICE Futures Europe exchange declined as much as $1.71, or 2.5 percent, to $68.17 a barrel, and traded at $68.65 at 11:05 a.m. London time.



Last Updated: July 29, 2009 06:19 EDT

[frawin]

September Front Month crude closed at $63.35 down $3.88 on the day, August Front Month Natural Gas closed at $3.379, down $0.156 on the day. Below is the Weekly Doe/EIA inventory report for Crude and products, the US continues to reduce consumption, which is good.



Summary of Weekly Petroleum Data for the Week Ending July 24, 2009

U.S. crude oil refinery inputs averaged 14.6 million barrels per day during the
week ending July 24, 171 thousand barrels per day below the previous week's
average. Refineries operated at 84.6 percent of their operable capacity last
week. Gasoline production fell last week, averaging nearly 9.0 million barrels
per day. Distillate fuel production decreased last week, averaging about 4.0
million barrels per day.

U.S. crude oil imports averaged 10.0 million barrels per day last week, up 821
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.5 million barrels per day, 586 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged nearly 1.0 million barrels per day. Distillate fuel imports
averaged 254 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 5.1 million barrels from the previous week. At
347.8 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 2.3 million barrels last week, and are in the upper half of the
average range. Both finished gasoline inventories and gasoline blending
components decreased last week. Distillate fuel inventories increased by 2.1
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories increased by 2.0 million
barrels last week and are above the upper limit of the average range. Total
commercial petroleum inventories increased by 5.5 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 18.7
million barrels per day, down by 4.1 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 9.2
million barrels per day, up by 0.8 percent from the same period last year.
Distillate fuel demand has averaged about 3.3 million barrels per day over the
last four weeks, down by 10.7 percent from the same period last year. Jet fuel
demand is 13.3 percent lower over the last four weeks compared to the same
four-week period last year.




                                           

[frawin]

Oil Climbs Above $70 as Manufacturing Spurs Recovery Optimism



By Grant Smith

Aug. 3 (Bloomberg) -- Crude oil traded above $70 a barrel for the first time in a month on signs that industrial activity is picking up and may trigger a recovery in fuel demand.

Oil gained as factory output in China rose to the highest in almost a year, while a U.S. manufacturing index due today may show conditions in July were the best in almost a year. Oil may rise more than other commodities as demand rebounds, said Nouriel Roubini, the New York University economist who predicted the credit crisis.

"Asia will come out of the recession sooner and help the rest of the world," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "With commodities, risk aversion is lower. We have had economic indicators that were better than expected. The overall data is pointing to better developments in the coming weeks and months."

Crude oil for September delivery rose as much as $1.50, or 2.2 percent, to $70.95 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $70.70 a barrel at 11:30 a.m. in London. Crude reached $71.85 a barrel on July 1.

The Organization of Petroleum Exporting Countries increased oil output for a fourth month in July, with quota compliance slipping as some members took advantage of strong prices, a Bloomberg News survey showed.

OPEC oil output averaged 28.39 million barrels a day last month, up 45,000 from June, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 26.035 million barrels a day, 1.19 million more than their target.

U.S. Manufacturing

The Institute for Supply Management may report today its U.S. manufacturing index climbed to 46.5 in July, the highest level in almost year, according to a Bloomberg survey of economists. Readings below 50 signal contraction.

"The implication is that there's going to be a pretty solid demand recovery later this year," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "It's definitely sentiment-driven at the moment rather than fundamentally driven."

China's official Purchasing Managers' Index rose for a fifth month to a seasonally adjusted 53.3 in July from 53.2 in June, the Federation of Logistics and Purchasing said Aug. 1. A survey today by CLSA Asia-Pacific markets showed manufacturing rose to a one-year high as stimulus spending stoked domestic demand. China accounts for about 45 percent of Asia's oil use.

'Least Resistance'

"Over the short term, it seems that the path of least resistance is higher," said Edward Meir, an analyst with MF Global Ltd. in Connecticut. "Investors are apparently still enthralled by the recovery trade, murky as its final outcome seems to be at this stage."

Brent crude oil for September settlement gained as much as $1.19, or 1.7 percent, to $72.89 a barrel on London's ICE Futures Europe exchange. It traded at $72.66 a barrel at 11:30 a.m. London time.

Hedge-fund managers and other large speculators increased their bets on oil prices to rise, according to weekly data from the U.S. Commodity Futures Trading Commission. Net long positions in New York oil futures, or the difference between orders to buy and sell oil, doubled to 4,576 contracts in the week to July 28.

Last Updated: August 3, 2009 06:32 EDT

[Tobina+1]

Frank; I drove through Bartlesville last week and saw that gas was again about $0.15-20 lower in OK than in KS.

[frawin]

Tobina. Myrna and I notice that everytime we drive to Howard and other areas in Kansas. On a State Tax basis Kansas State Taxes are approximately 8 cents higher than Oklahoma. I would guess some of the dfferences is Jobber and Dealer higher margins and  transportation.

[frawin]

September Crude Oil settled at $71.58, up $2.13 on the day, September Natural Gas settled at $4.03, up $0.378 on the day. The  10% move up in Natural Gas is pretty significant.

[frawin]

Oil Falls From Seven-Week High on Concern Recent Gains Overdone



By Grant Smith

Aug. 4 (Bloomberg) -- Crude oil fell from a seven-week high on speculation that gains of 13 percent in the past three days weren't supported by an improvement in demand.

Crude stockpiles in the U.S., the world's biggest energy consumer, probably increased for a second week, according to a Bloomberg News survey before tomorrow's Energy Department report. Oil futures declined as equity indexes slipped in Europe, where the Stoxx 600 dropped 0.7 percent.

"The actual situation in the oil market doesn't justify levels about $70," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Inventories are high, demand is still really weak, the risk is increasing we see a bigger correction towards $60."

Crude oil for September delivery fell as much as $1.30, or 1.8 percent, to $70.28 a barrel on the New York Mercantile Exchange. It was at $70.74 a barrel at 12:36 p.m. London time.

Yesterday, futures rose $2.13, or 3.1 percent, to $71.58, the highest settlement since June 12. Prices have climbed 58 percent this year.

Kuwait expects oil prices to stay between $70 and $80 a barrel until the end of this year on optimism about a global economic recovery, state-run KUNA news agency cited the country's oil minister as saying.

Crude prices reflect optimism about financial markets and the return of many companies to profitability, Sheikh Ahmed Abdullah al-Sabah said in Rome, according to KUNA.

Crude Inventories

U.S. crude inventories probably rose 1.15 million barrels in the week ended July 31, according to the median of 12 estimates by analysts surveyed by Bloomberg News. Nine of those surveyed said stockpiles rose and three forecast a drop.

Gasoline supplies probably fell 1.25 million barrels from 213.1 million the week before, according to the survey.

"Investors seem to be betting on a V-shaped recovery without giving much thought to a scenario where the economy bumps along the bottom for months at a time," said Edward Meir, an analyst at MF Global Ltd. in Connecticut. "These worries will inevitably resurface."

Oil gained 13 percent in the three trading sessions between July 30 and Aug. 3. The Institute for Supply Management said yesterday its manufacturing index climbed to 48.9 last month from 44.8 in June and CLSA Asia-Pacific Markets said its index of China's manufacturing rose to a one-year high. China accounts for about 45 percent of Asia's oil use.

The Standard & Poor's 500 Index climbed above 1,000 for the first time since November, prompting speculation raw-material demand and prices will increase. The index added 1.5 percent to 1,002.63 in New York, the highest level since President Barack Obama was elected on Nov. 4.

Brent crude oil for September settlement dropped as much as $1.31, or 1.8 percent, to $72.24 a barrel on London's ICE Futures Europe Exchange. It was at $72.86 a barrel at 12:24 p.m. in London.

Last Updated: August 4, 2009 07:39 EDT