Crude Oil Updates... From Frank

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Note: The weekly eia/doe reportshows  total Commercial Petroleum Inventories declined by 8.1 million barrels last week.

Oil Heads for Biggest Annual Gain in a Decade Amid Iran Unrest

Dec. 30 (Bloomberg) -- Crude oil was little changed, heading for its biggest annual gain in a decade, on forecasts that U.S. stockpiles are narrowing while unrest in Iran sows concerns supply will be disrupted.
U.S. crude inventories likely fell by 1.85 million barrels last week, according to analysts surveyed by Bloomberg News before an Energy Department report due today at 10:30 a.m. in Washington. Iran, holder of the world's second-largest crude reserves, detained about 1,000 people after the biggest anti- government demonstrations in six months.
"Stocks are showing the market is getting towards a more balanced situation, though it will take time," said Alexandra Kogelnig, a consultant with JBC Energy GmbH in Vienna. "Tensions in Iran are always a factor even if there is nothing immediately happening, as if something major happens it will affect exports."
Crude oil for February delivery was at $78.70 a barrel, 14 cents lower in electronic trading on the New York Mercantile Exchange, as of 11:50 a.m. London time. It earlier rose as much as 32 cents, or 0.4 percent, to $79.19 a barrel. Futures are set for a 77 percent gain this year, the biggest since 1999. Prices have tripled in the past decade.
Iran yesterday accused Western countries of inciting clashes on Dec. 27 between opposition supporters and security forces in the capital Tehran and other cities, which killed at least eight people, according to state media reports.
"After strong gains over the past year, there's a propensity to lock in profits and reposition for 2010," said Mark Pervan, a senior commodity strategist at ANZ Banking Group Ltd. in Melbourne. "Now, I think you're going to see sideways movement."
Dollar Gains
A stronger dollar is limiting gains in oil prices by reducing the appeal of commodities as an investment. The dollar may rise against the euro for a third day before a report economists said will show U.S. manufacturing expanded in December for a fifth month, adding to signs the economy is gaining momentum. The dollar traded for $1.4338 against the euro at 9:38 a.m. London time.
A "major Arctic wave" heading for the U.S. will likely cause millions of households to boost heating fuel use this winter, according to State College, Pennsylvania-based AccuWeather.com.
Consumer Confidence
U.S. inventories of crude oil probably declined from 327.5 million the prior week, according to the Bloomberg survey of 14 analysts before the Energy Department's report. Gasoline supplies are forecast to climb by 1 million barrels, and distillates, a category that includes heating oil and diesel, to fall by 2.23 million.
The American Petroleum Institute said yesterday inventories of crude oil rose 1.73 million barrels last week to 330.5 million. Refinery utilization rates fell to 78.2 percent in the week ended Dec. 25 from 78.4 percent a week earlier, according to the industry-funded API.
"It seems the demand outlook is the very big swing variable in the oil market at the moment," said Ben Westmore, a minerals and energy economist at National Australia Bank, in a Bloomberg Television interview. "If you couple that with the fact that you have a large supply overhang, it's difficult to see the oil price moving higher in a trend sense."
Brent crude for February settlement rose for a sixth day, advancing as much as 56 cents, or 0.7 percent, to $78.20 a barrel on LondonR17;s ICE Futures Europe exchange.

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China will surpass the US in energy consumption in the future. In my opinion China's ever increasing
energy demand, which drove the price of oil to $150.00/barrel,  is one of the main causes of the worldwide recession.
China's 2009 Crude Oil Imports Advance to Record   


By Bloomberg News

Jan. 10 (Bloomberg) -- China, the world's second-largest energy consumer, increased crude oil purchases to a record last year to meet rising demand spurred by the government's $586 billion stimulus spending.

Crude oil imports reached 203.8 million metric tons last year, or 4.1 million barrels a day, according to preliminary data released by the General Administration of Customs today. Net purchases reached a record 198.7 million tons.

Government stimulus may boost ChinaR17;s 2009 economic growth by more than 8 percent, according to official forecasts. The world's fastest-growing major economy may increase its refining capacity by 2.9 million barrels a day between 2008 and 2014 to meet increased fuel consumption, the Paris-based International Energy Agency said in a report on Dec. 11.

R20;Oil imports have surged in 2009 also as the nation has been increasing emergency stockpiling," Wang Aochao, head of China energy research at UOB-Kay Hian Ltd., said by telephone in Shanghai. "We expect imports to still rise more than 10 percent this year."

China has finished building its emergency oil reserves under the first phase of its stockpiling plan, the National Energy Administration said in June. Late last year, the country started building stockpile bases under the second phase.

Net crude oil imports rose to 20.9 million tons last month, from 16.7 million tons in November, today's data showed.

Imports of oil products, including gasoline and diesel, fell 5.4 percent to 37 million tons last year and reached 3.3 million tons in December, the customs data showed.

Exports of oil products gained 46 percent to 25 million tons in 2009 and stood at 3.67 million tons in December.

Exports of coal, used in power generation and steelmaking, declined to 22.4 million tons in 2009 and stood at 2.07 million tons in December from 1.43 million tons in November. The customs agency didn't give coal import figures.

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Today's eia/DOE Inventory report is bearish for near term Gasoline prices and pump prices should be coming down near term.


Summary of Weekly Petroleum Data for the Week Ending January 8, 2010

U.S. crude oil refinery inputs averaged 14.0 million barrels per day during the
week ending January 8, 213 thousand barrels per day above the previous week's
average. Refineries operated at 81.3 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 8.5 million barrels
per day. Distillate fuel production increased last week, averaging 3.9 million
barrels per day.

U.S. crude oil imports averaged 8.9 million barrels per day last week, up 540
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.2 million barrels per day, 1.3 million
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 892 thousand barrels per day. Distillate fuel
imports averaged 537 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 3.7 million barrels from the previous week. At
331.0 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
increased by 3.8 million barrels last week, and are above the upper limit of
the average range. Finished gasoline inventories decreased while blending
components increased last week. Distillate fuel inventories increased by 1.4
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories decreased by 3.5 million
barrels last week and are below the lower limit of the average range. Total
commercial petroleum inventories increased by 3.6 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 19.0
million barrels per day, down by 0.9 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 8.9
million barrels per day, up by 0.4 percent from the same period last year.
Distillate fuel demand has averaged 3.7 million barrels per day over the last
four weeks, down by 4.0 percent from the same period last year. Jet fuel
demand is 3.2 percent higher over the last four weeks compared to the same
four-week period last year

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Oil Falls for a Fifth Day on Dollar Strength, Rising Supplies


By Rachel Graham

Jan. 15 (Bloomberg) -- Crude oil fell for a fifth day as the dollar gained against the euro, curbing demand for commodities as a currency hedge.

Oil dropped below $80 a barrel this week after a U.S. government report showed supplies of crude and fuels increased. The dollar gained on speculation a slowdown in Chinese bank lending will damp growth in the world’s third-biggest economy.

“If the economy is improving there is an expectation oil stocks will start to fall, but it’s not happening,” said Frank Schallenberger, head of commodities research at Landesbank Baden-Wuerttemberg. “The dollar is an extra point for today.”

Crude oil for February delivery fell as much as 62 cents, or 0.8 percent, to $78.77 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $78.89 at 9:50 a.m. London time. A close at that level would mean a drop of 4.4 percent this week.

The dollar traded as high as $1.4378 against the euro.

Crude oil may fall next week on speculation that U.S. inventories will climb for a third week and as fuel demand declines, a Bloomberg News survey of 41 analysts showed.

Oil prices will drop through Jan. 22, according to 42 percent of the respondents. Thirteen respondents, or 32 percent, forecast an increase and 11 said prices will be little changed. Last week, 44 percent of analysts forecast a decline in futures.

Oil settled below $80 a barrel on Jan. 13, the first time this year, after the U.S. Energy Department said crude and fuel inventories increased. Distillate fuel stockpiles rose for the first week in five.

Crude oil stockpiles climbed for a second week, adding 3.7 million barrels to 331 million barrels, the Energy Department said Jan. 13. Gasoline and distillate inventories also rose.

Brent crude for March settlement fell as much as 67 cents, or 0.9 percent, to $77.90 a barrel on the London-based ICE Futures Europe exchange. It was at $77.97 at 9:51 a.m. London time.

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Oil Falls to Lowest This Year on Equities, Global Stockpiles



By Grant Smith

Jan. 19 (Bloomberg) -- Crude oil fell to its lowest this year in New York, declining in tandem with equities, on speculation global stockpiles remain more than adequate.

The Organization of Petroleum Exporting Countries won't need to raise oil production this year as its output of natural gas liquids increases, the International Energy Agency's deputy executive director said yesterday. Oil also slipped as Japan Airlines Corp., AsiaR17;s largest carrier, filed for bankruptcy, raising concern its fuel hedges may be liquidated.

R20;I still see prices at current levels as overvalued by about $2 a barrel," said Andy Sommer, an oil analyst at Eleltrizitaets-Gesellschaft in Dietikon, Switzerland. "Increasing demand in China and emerging markets is still not strong enough to offset declines in the other countries. OPEC is producing too much to balance the market."

Crude oil for February delivery dropped as much as 93 cents, or 1.2 percent, to $77.07 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since Dec. 24. It was at $77.49 as of 10:31 a.m. London time.

Futures dropped 5.7 percent last week, the first weekly decline in five, after U.S. fuel supplies rose. Yesterday's trades will be combined with today's because of the Martin Luther King Jr. holiday in the U.S.

February futures, which settled at $78 a barrel on Jan. 15, expire tomorrow. The more widely traded March contract fell as much as 97 cents, or 1.2 percent, to $77.40 a barrel.

German Confidence

European stock prices declined before a report that may show investor confidence in Germany, the region's biggest economy, dropped for a fourth month in January amid signs the recovery is slowing. Asian shares also fell, while U.S. index futures were little changed.

Japan Airlines Corp. filed for bankruptcy under a government-backed plan to help reduce debts, cut unprofitable operations and access new investment.

Brent crude oil for March settlement fell as much as $1.28, or 1.7 percent, to $75.82 a barrel on the London-based ICE Futures Europe exchange. It traded for $76.26 as of 10:33 a.m. local time.

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March Crude is trading at $77.825, down $1.50


Oil Falls on Forecasts of U.S. Supply Increase, Dollar Strength



By Grant Smith and Ann Koh

Jan. 20 (Bloomberg) -- Oil fell in New York before a report forecast to show U.S. crude inventories climbed for a third week, and as a stronger dollar curbed oil's appeal for hedging inflation.

Oil pared some of yesterday's gains on speculation China, the second-biggest oil user, may step up efforts to curb credit growth, damping energy demand. The euro fell to the lowest level in five months against the U.S. currency, making dollar-priced assets like oil appear more expensive to foreign investors.

R20;U.S. inventories still need to come down," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "The market doesn't have much impetus as it awaits the data, with the dollar capping gains across commodities."

Crude oil for February delivery fell as much as 97 cents, or 1.2 percent, to $78.05 a barrel on the New York Mercantile Exchange, and traded at $78.28 at 9:44 a.m. London time. February futures expire today. The more-active March contract declined as much as 96 cents, or 1.2 percent, to $78.36.

Chinese regulators asked some of the nation's banks to limit credit after banks lent a record 9.59 trillion yuan ($1.4 trillion) last year. U.S. crude inventories probably climbed for a third week through Jan. 15, according to a Bloomberg News survey before an Energy Department report tomorrow.

The dollar climbed to $1.42 per euro as of 9:03 a.m. in London from $1.4288 yesterday in New York, on concern GreeceR17;s deteriorating finances will weigh on EuropeR17;s economic recovery. It earlier strengthened to $1.4167, the highest since Aug. 19.

Stockpiles Gain

The Energy Department report tomorrow will probably show that crude oil stockpiles climbed 2.5 million barrels in the week ended Jan. 15 from 331 million the prior week, according to the median of 11 analyst responses in a Bloomberg News survey. Gasoline supplies probably increased 2 million barrels, the survey showed.

Futures dropped 5.7 percent last week, the first weekly decline in five, after U.S. fuel supplies rose. Oil surged to $83.95 a barrel on Jan. 11 as cold weather in the eastern U.S. bolstered consumption of heating fuels and the dollar declined against the euro.

R20;The market appears to have fully priced in the cold snap in the U.S., suggesting any improvement in weather conditions, likely off a cold base, will trigger selling," Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note.

The Organization of Petroleum Exporting Countries raised its forecast for global oil demand this year by 20,000 barrels to 85.15 million barrels a day. Consumption will expand 820,000 barrels a day, or 1 percent, from 2009, according to the monthly report from OPEC's Vienna-based secretariat released yesterday.

Brent crude oil for March settlement declined as much as 98 cents, or 1.3 percent, to $76.65 a barrel on the London-based ICE Futures Europe exchange. It was at $76.95 at 9:46 a.m. London time.

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March Crude is trading down $0.80 this morning   at $74.45



By Grant Smith

Jan. 26 (Bloomberg) -- Crude oil fell before a report forecast to show that crude supplies increased in the U.S. last week, while concerns persisted that China will tighten credit.

Oil traded below $75 a barrel in New York as the dollar strengthened against the euro, dulling the appeal of crude as an inflation hedge. Crude was also hurt by speculation that oil demand may wane in China, where banks have begun restricting new loans, responding to a push by regulators to contain credit.

"Fundamentally we now have a very bearish situation," said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. "Oil stockpiles are still very high worldwide. China might tighten its monetary policy. That's also maybe an indication for a slowdown in the economic recovery."

Crude for March delivery fell as much as $1.12, or 1.5 percent, to $74.14 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $74.50 a barrel at 1:40 p.m. in London. The contract climbed 72 cents to $75.26 yesterday, its first gain in four days. Futures have fallen 6.3 percent this year.

The U.S. currency strengthened 0.5 percent to $1.4076 per euro as of 1:24 p.m. London time.

Lending growth in China slowed in the third week of January from the month's first two weeks, the Shanghai Securities News reported today, citing unidentified people.

A U.S. Energy Department report tomorrow will probably show crude-oil inventories rose last week as imports gained and refineries shut units, based on a Bloomberg survey of analysts.

Rising Stockpiles

Stockpiles probably climbed 1.58 million barrels in the week ended Jan. 22 from 330.6 million the prior week, according to the median of 12 analyst estimates. Refining rates, already at their lowest outside the Atlantic hurricane season since at least 1989, probably fell 0.3 percentage point.

The industry-funded American Petroleum Institute in Washington, D.C., will release its own inventory report at around 4:30 p.m. local time today. Daily trading in New York is settled at 2:30 p.m. local time when floor trading closes.

The recovery in oil demand will slow down toward the end of the year, and any reduction in inventories will be checked by rising production of natural-gas-liquids, according to the London-based Centre for Global Energy Studies.

"Although we do not expect oil prices to fall heavily, the dramatic recovery seen in 2009 may now have run out of steam," according to analysts at the center, founded by former Saudi Arabian oil minister Sheikh Ahmad Zaki Yamani. "Whatever growth does materialize will be heavily weighted toward the beginning of the year."

U.S. Inventories

Prices between $70 and $80 are "almost perfect" and provide sufficient returns for investment without harming the global economy, Saudi Arabia's Oil Minister Ali al-Naimi said yesterday.

Saudi Arabia is the biggest producer in the Organization of Petroleum Exporting Countries. The group, which sells about 40 percent of the world's oil, is pumping about 1.77 million barrels a day more than output quotas set late 2008 to prevent a glut. Iraq isn't restricted by quota.

"OPEC are going to have real problems curbing their supply," Altavest's Hartmann said. "This price level isn't killing or crimping the economy. But the supply eventually is going to kill this market."

Brent oil for March settlement fell as much as $1.06, or 1.4 percent, to $72.63 a barrel on the London-based ICE Futures Europe exchange. It was at $73.05 a barrel at 1:40 p.m. in London. Yesterday, prices gained 86 cents, or 1.2 percent, to $73.69 a barrel.

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Oil Rises With Equities, Capping First Monthly Drop Since July



By Grant Smith and Yee Kai Pin

Jan. 29 (Bloomberg) -- Crude oil rose, limiting its first monthly drop since July, as advancing equity markets reaffirmed confidence in the economic recovery.

The U.S. Senate yesterday unanimously passed sanctions on foreign companies that sell refined petroleum to Iran, holder of the world's second-largest crude reserves. Oil has lost 6.7 percent this month on concern the U.S. government will limit trading by banks and that China will take further steps to cool its economy.

"We're seeing some stabilization as European equities are mostly positive and the dollar is a little weaker," said Eugen Weinberg, commodity strategist with Commerzbank AG in Frankfurt. "Fundamentals are not positive at the moment. The demand side is recovering but definitely not as strong as expected."

Crude oil for March delivery increased as much as 45 cents, or 0.6 percent, to $74.09 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $73.90 at 10:09 a.m. local time.

The dollar was little changed at $1.3975 against the euro after earlier reaching $1.3913, the highest since July 14.

European stocks advanced, with the Dow Jones Stoxx 600 Index trimming its third straight weekly drop, as Infineon Technologies AG raised its earnings outlook and Bayerische Motoren Werke AG said it may have a pretax profit.

The U.S., its European allies and UN inspectors suspect Iran is trying to develop the means to build a nuclear weapon under the guise of a civilian atomic-energy program. The U.S. says Iranian leaders are rebuffing efforts to settle the dispute.

'Biggest Risk'

"By far the biggest risk for the market is something happening to Iran," said Commerzbank's Weinberg. "Should prices recover, you'll start to see more talk about this in the market. But it's not going to lead to a scarcity of oil with capacity in the other OPEC countries."

Oil may fall next week as U.S. supplies increased and fuel demand lags behind year-earlier levels, a Bloomberg News survey showed.

Eighteen of 38 analysts and traders polled, or 47 percent, said prices will decline through Feb. 5. Ten respondents, or 26 percent, forecast an increase and 10 said futures will be little changed. Last week, 43 percent of respondents predicted a drop.

U.S. crude oil and gasoline inventories are more than 4 percent over the five-year average level, according to Energy Department data released on Jan. 27. Distillate fuel stockpiles, including heating oil and diesel, climbed to 157.5 million barrels last week, 16.2 percent above the average.

Brent crude oil for March settlement was at $72.41 a barrel on the London-based ICE Futures Europe exchange, up 28 cents at 9:22 a.m. London time. Yesterday, the contract slipped 11 cents to $72.13, the lowest settlement since Dec. 15.

"The optimism that led into 2010 has dried up very quickly," said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. "Economies have been running off stimulus packages, not off genuine demand."

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Oil Rises a Third Day on U.S. Supply Forecast, Dollar Weakness



By Grant Smith and Christian Schmollinger

Feb. 3 (Bloomberg) -- Crude oil rose in New York for a third day before a report forecast to show that U.S. supplies of distillate fuels such as heating oil shrank last week.

Oil was also supported as a decline in the U.S. dollar heightened crude's appeal for hedging inflation. The U.S. Energy Department will likely report a 1.15 million-barrel reduction in U.S. distillate stockpiles for the week ended Jan. 29, according to a Bloomberg News survey. OPEC is unlikely to change oil- production quotas at its meeting next month, group Secretary- General Abdalla el-Badri said yesterday.

R20;All eyes are back on U.S. fuel inventories today and we expect a small draw in distillates," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "There's no point in OPEC doing anything, as prices are okay for most members, while hiking output would oversupply the market."

Crude oil for March delivery rose as much as 81 cents, or 1.1 percent, to $78.04 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.87 at 9:35 a.m. London time. Yesterday, it gained 3.8 percent, the most since Sept. 30, to settle at $77.23.

Brent crude oil for March settlement rose as much as 93 cents, or 1.2 percent, to $76.99 a barrel on the London-based ICE Futures Europe exchange. The contract earlier fell as much as 43 cents to $75.63. Yesterday, it rose 4 percent, the most since Nov. 16, to settle at $76.06.

Dollar Index Falls

The Dollar Index, which tracks the U.S. currency against those of six major trading partners, dropped for a third day before a report that may show U.S. service industries expanded at the fastest pace in more than a year. The index was at 78.708 at 9:27 a.m. London time.

R20;If people are optimistic about the economy and buying equities, then that will drive oil prices higher," said Clarence Chu, a trader with options dealer Hudson Capital Energy in Singapore. "Having the dollar index drop below 79 is enough to move oil higher."

U.S. distillate stockpiles dropped 1.15 million barrels in the week ended Jan. 29 from 157.5 million the prior week, according to the median of 16 estimates in Bloomberg's survey. The Energy Department will release its report at 10:30 a.m. in Washington.


Analysts were split over whether stockpiles of crude oil rose or fell last week. Inventories climbed 400,000 barrels from 326.7 million the previous week, according to the survey. Eight of the respondents said there was a gain, six forecast a decline and two estimated that there was no change.

Yesterday the industry-funded American Petroleum Institute said crude inventories rose 4.72 million barrels last week.

The Organization of Petroleum Exporting Countries, responsible for 40 percent of global oil supply, will meet on March 17 in Vienna to review production targets. The organization's commitment to record output cuts announced in late 2008 has flagged after a recovery in prices, which rose by 78 percent last year.

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Crude is trading flat to off $0.25 this morning.


Summary of Weekly Petroleum Data for the Week Ending January 29, 2010

U.S. crude oil refinery inputs averaged 13.5 million barrels per day during the
week ending January 29, 163 thousand barrels per day below the previous week's
average. Refineries operated at 77.7 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 8.6 million barrels
per day. Distillate fuel production decreased last week, averaging 3.5 million
barrels per day.

U.S. crude oil imports averaged 8.4 million barrels per day last week, up 559
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.4 million barrels per day, 1.4 million
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 926 thousand barrels per day. Distillate fuel imports
averaged 438 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 2.3 million barrels from the previous week. At
329.0 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
decreased  by 1.3 million barrels last week, and are above the upper limit of
the average range. Finished gasoline inventories increased while blending
components inventories decreased last week. Distillate fuel inventories
decreased by 1.0 million barrels, and are above the upper boundary of the
average range for this time of year. Propane/propylene inventories decreased
by 2.9 million barrels last week and are below the lower limit of the average
range. Total commercial petroleum inventories increased by 0.7 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 18.8
million barrels per day, down by 2.0 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 8.6
million barrels per day, down by 0.5 percent from the same period last year.
Distillate fuel demand has averaged 3.7 million barrels per day over the last
four weeks, down by 9.1 percent from the same period last year. Jet fuel demand
is 0.2 percent higher over the last four weeks compared to the same four-week
period last year.