Crude Oil Updates... From Frank

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Oil Rises From Seven-Week Low on Equity Gain, Dollar Weakness



By Grant Smith

Feb. 8 (Bloomberg) -- Crude oil futures rebounded from a seven-week low as equity markets advanced while a weaker U.S. dollar restored crude’s appeal for hedging inflation.

Oil also gained after Nigerian rebels said they disabled a pipeline operated by Royal Dutch Shell Plc. On Feb. 5, the commodity fell to its lowest since mid-December as higher-than- forecast job losses in the U.S. depressed global stock and commodity prices.

“The recovery we’re seeing today is still driven by sentiment rather than fundamentals, led by the dollar and stock markets,” said Hannes Loacker, an analyst with Raiffeisen Zentralbank Oesterreich in Vienna. “A price of $70 is more in line with fundamentals than the higher levels we saw before, and as the year goes on the supply-demand picture will tighten.”

Crude oil for March delivery rose as much as $1.20, or 1.7 percent, to $72.39 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was up 93 cents at $72.12 at 9:28 a.m. in London. The contract dropped 2.7 percent to $71.19 a barrel on Feb. 5, the lowest settlement since Dec. 15.

European stocks gained, rebounding from the biggest weekly slump in 11 months, as investors weighed European finance chiefs’ endorsement of a Greek austerity plan. The dollar was 0.6 percent weaker at $1.3708 against the euro as of 9:27 a.m. London time.


A U.S. government report tomorrow may show wholesale inventories increased for a third month in December, according to economists surveyed by Bloomberg News.

Attack in Nigeria

“Everyone is going to be watching every piece of economic data like a hawk, looking for signs of self-sustaining economic recovery,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “The geopolitical risk factors were on the back burner through 2009, but in 2010 they are back and the big one is Nigeria.”

An overnight attack at Obunoma, south of the Nigerian oil hub of Port Harcourt, cut supplies from the Nembe Creek, Soku, Belema and Ekulama fields, the Joint Revolutionary Council said in an e-mailed statement yesterday. Shell hasn’t received any report of the attack, the company’s Nigeria spokesman, Precious Okolobo, said yesterday.

March Brent crude, which expires Feb. 11, rose as much as $1.23, or 1.8 percent, to $70.82 a barrel on the London-based ICE Futures Europe exchange. It was at $70.56 at 9:27 a.m. London time.

Hedge-fund managers and other large speculators reduced their bets on rising oil prices for a third week, according to U.S. Commodity Futures Trading Commission data.

Speculative net-long positions, the difference between orders to buy and sell the commodity, fell 14 percent to 86,027 contracts on the New York exchange in the week ended Feb. 2, the Washington-based commission said in its weekly report.

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Crude Oil Rises a Fourth Day as IEA Bolsters Demand Outlook



By Grant Smith and Christian Schmollinger

Feb. 11 (Bloomberg) -- Crude oil rose for a fourth day in New York as the International Energy Agency raised its forecast for global oil demand in 2010.

The IEA increased its estimate for world demand by 170,000 barrels a day to 86.5 million barrels a day on accelerating growth in emerging markets. That means a gain of 1.6 million barrels a day, or 1.8 percent, from 2009. Still, the IEA expects no consumption growth this year from the countries in the Organization for Economic Cooperation and Development.

R20;The IEA is adjusting emerging market growth assumptions up in China and the rest of Asia on higher GDP," said Harry Tchilinguirian, head of commodity derivatives research at BNP Paribas SA in London. "But you still face considerable uncertainty as to the recovery of demand in OECD countries."

Crude for March delivery rose as much as 58 cents, or 0.8 percent, to $75.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.78 at 9:52 a.m. London time.

Oil climbed 1 percent yesterday as the U.S. Department of Energy raised its demand projection to 85.3 million barrels a day from 85.18 million in its monthly Short-Term Energy Outlook.

Prices also gained after the U.S. Treasury Department announced restrictions on four companies and one individual with links to IranR17;s Islamic Revolutionary Guard Corps. The U.S. has accused the Guard of developing weapons of mass destruction and supporting terrorism.

Iran 'in Background'

Tens of thousands of Iranians joined a rally in Tehran today to mark the 31st anniversary of the Islamic regime, as opposition leaders called for protests and riot police deployed throughout the city. Iran holds the world's second-largest crude reserves.


R20;At this point I think Iran is still in the background," said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. "But if the rhetoric ratchets up, that's going to push it more into the light and provide a good excuse for investors to buy back in and support prices."

An Energy Department inventory report scheduled for yesterday was delayed until tomorrow because a snowstorm shut down government offices in Washington. The report may show stockpiles of oil grew by 1.6 million barrels, according to a Bloomberg survey of 16 analysts.

The industry-funded American Petroleum Institute reported this week that U.S. crude inventories rose to the highest level since October. Stockpiles gained 7.2 million barrels to 337.6 million last week, according to the Washington-based group.

Brent crude for March settlement gained as much as 54 cents, or 0.7 percent, to $73.08 a barrel on the London-based ICE Futures Europe exchange. It was at $72.83 a barrel at 9:46 a.m. London time. The contract added 41 cents, or 0.6 percent, to $72.54 a barrel yesterday.

The March contract expires today. The more actively traded April future was at $73.44 a barrel, up 32 cents, at 9:55 a.m. London time, after rising 0.6 percent yesterday.

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Crude Falls After China Seeks to Cool Expansion, Dollar Gains



By Grant Smith

Feb. 12 (Bloomberg) -- Oil fell in New York for the first day in five after China, the world’s second-largest oil consumer, sought to cool its economic expansion.

The People’s Bank of China ordered banks to set aside more deposits as reserves for the second time in a month, sending crude below $74 a barrel and strengthening the dollar. A weekly Energy Department report today may show crude and gasoline supplies rose last week, according to analysts surveyed by Bloomberg News.

China “has surprised the market a bit in that it’s happening so quickly after the last increase” in the country’s reserve requirement, said Mike Wittner, head of oil market research at Societe Generale SA in London.

Crude oil for March delivery fell as much as $1.72, or 2.3 percent, to $73.56 a barrel in electronic trading on the New York Mercantile Exchange and was trading at $73.95 at 10:49 a.m. in London.

Brent crude oil for April delivery fell as much as $1.52, or 2.1 percent, to $72.60 a barrel on the London-based ICE Futures Europe exchange. The contract was at $72.91 at 10:50 a.m. London time.

China’s central bank said today it will raise banks’ reserve requirement ratio by 50 basis points. China’s policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year to drive recovery from the first global recession since World War II.

Dollar Recovery

“Everything has had a bit of a setback this morning,” said Tony Machacek, a broker at Bache Commodities Ltd. in London. “The Chinese decision has helped a dollar recovery, which in turn has led commodities like oil lower.”

Yesterday, New York crude futures rose 1 percent to settle at $75.28.

The Energy Department’s weekly report, delayed by two days because of snowstorms, will probably show U.S. crude stockpiles climbed 1.6 million barrels in the week to Feb. 5, based on the median estimate from 16 analysts.

Gasoline inventories are expected to have rebounded 600,000 barrels from the previous week. On Feb. 9, the industry-funded American Petroleum Institute reported crude supplies rose to the highest level since October last year and gasoline reached 228.8 million barrels, the most since March 1999.

“The oversupply in the market is quite significant at the moment,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “It’s difficult to see why prices will continue to hover around current levels. A price below $70, maybe around $60, would be more sustainable.”

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Markets appear to be pretty well supplied for the short term.Oil

Trades Near $74 on China Economic Tightening, Saudi Concern


Feb. 15 (Bloomberg) -- Oil was little changed near $74 a barrel after China sought to temper its economic expansion and a Saudi adviser said the U.S. aims to cut oil imports.

China, the world's second-largest oil consuming country, ordered banks to set aside more deposits as reserves for the second time in a month on Feb. 12, signaling slower economic growth and reduced energy demand. Saudi oil ministry adviser Mohammad al-Sabban said the U.S. is promoting nuclear power as a means of cutting oil imports.

"The market is a bit uneasy about the Chinese tightening," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. China is not "yet the largest importer; it's not yet the largest consumer region. Still, it is one of the most important ones."

Crude oil for March delivery traded at $74.25 a barrel, up 12 cents, in electronic trading on the New York Mercantile Exchange at 1:20 p.m. London time. The contract fell $1.15, or 1.5 percent, to settle at $74.13 on Feb. 12, the first decline in five days.

The dollar advanced to $1.3608 against the euro as of 1:21 p.m. London time from $1.3632. The Dollar index, a six-currency gauge of the greenback's value, rose 0.1 percent to 80.363. A stronger dollar curbs demand for commodities as an alternative investment.

"What we would be looking for in the next week is how the U.S. dollar is going to behave," said Harry Tchilinguirian, head of commodity derivatives research at BNP Paribas SA in London. "You are going to be looking at how the dollar is going to behave against a number of currency pairs."

U.S. Imports

The People's Bank of China said it will raise banks' reserve requirement ratio by 50 basis points. China's policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year to drive a recovery from the first global recession since World War II.

Sabban said at a conference in Jeddah, Saudi Arabia, today that the U.S. seeks to cut oil imports by 1.4 million barrels a day, about the same amount that the U.S. currently brings in from Saudi Arabia.

Exxon Mobil International Ltd. Vice President Brad Corson said today at the IP Week conference in London that energy demand will rise 35 percent from 2005 through 2030. Demand growth would have doubled over the period without energy-saving measures, Corson said.

Markets in China, Taiwan, Hong Kong, Singapore and Malaysia are closed today for the Lunar New Year holiday. U.S. markets are shut today for Presidents' Day.

U.S. Secretary of State Hillary Clinton, shoring up support in the Middle East for a hard line against Iran, said "evidence is accumulating" of that nation's intention to produce nuclear weapons. Clinton spoke last night at the U.S.-Islamic World Forum in Doha, Qatar. Iran holds the world's second-biggest oil reserves.

Brent crude for April delivery traded at $72.84 a barrel, up 8 cents, as of 1:28 p.m. on the ICE Futures Europe exchange in London.

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Oil Declines as Dollar Rises, U.S. Fuel Stockpiles Increase

Feb. 18 (Bloomberg) -- Crude oil fell for the first time in three days as the dollar strengthened and an industry report showed an increase in U.S. fuel supplies, fanning concern that demand in the world's biggest energy user is slow to recover.
Oil dropped from a four-week high as the U.S. currency extended gains against the euro, damping investor demand for commodities. The American Petroleum Institute said U.S. gasoline inventories rose last week to the highest since March 1999 and distillate fuel stockpiles ended a four-week drawdown. An Energy Department report today is forecast to show crude oil supplies increased, according to a Bloomberg News survey.
"Demand in the U.S. is still really weak," said Hannes Loacker, an analyst with Raiffeisen Zentralbank Oesterreich in Vienna. "Today's figures will be a trigger for prices. You'd have to see a draw in crude stocks of around 3 million barrels to move prices substantially higher."
Crude oil for March delivery fell as much as $1.01, or 1.3 percent, to $76.32 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.66 at 11:45 a.m. London time. Yesterday, the contract rose 32 cents to $77.33, the highest settlement since Jan. 20. Futures have lost 3.4 percent this year.
The dollar approached a nine-month high against the euro as signs of momentum in the U.S. economy added to speculation that the Federal Reserve will be one of the first major central banks to remove stimulus measures.
The U.S. currency strengthened to $1.3566 per euro as of 11:45 a.m. in London from $1.3607 in New York yesterday.
Gasoline Demand Falls
"The global economy is still realistically weak," said Peter McGuire, managing director at CWA Global Markets Pty in Sydney. "I don't see a lot of issues in terms of supply constraints out there and demand is relatively weak."
Brent crude oil for April delivery fell as much as $1, or 1.3 percent, to $75.27 a barrel on the London-based ICE Futures Europe exchange. It was at $75.46 at 11:44 a.m. London time. Yesterday, the contract gained 0.8 percent to $76.27, the highest settlement since Jan. 20.
U.S. gasoline consumption fell last week to the lowest level in 16 months as record winter snowstorms kept drivers off the roads from Texas to New England, according to MasterCard Inc., the second-largest credit-card company.
Motorists bought an average 8.84 million barrels a day of gasoline in the week ended Feb. 12, MasterCard said yesterday in its SpendingPulse report. Demand was the lowest since October 2008, when supplies were limited by two Gulf Coast hurricanes and the U.S. economy was spiraling into the worst recession since the 1930s.
Crude Supplies
U.S. crude oil inventories slipped 63,000 barrels in the week to Feb. 12, according to yesterday's API data. The Energy Department's report today will probably show supplies rose 1.73 million barrels from 331.4 million previously, based on the median of estimates from 18 analysts surveyed by Bloomberg.
The industry-funded API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that all inventory holders file reports with the Energy Department for its weekly survey.
Distillate fuel inventories, including heating oil and diesel, are expected to have fallen 1.5 million barrels from 156.2 million the prior week, according to the Bloomberg survey. Gasoline stockpiles probably increased 1.5 million barrels from 230.4 million.
In Germany, January sales of gasoil rose 8.5 percent from December to a 10-month high as cold weather boosted demand for the heating fuel, the country's petroleum association said today.
"We're bound in a range between $70 and $80," said Raiffeisen's Loacker. "If a break above $80 happens it will be driven by sentiment, by higher stock markets and a weaker U.S. dollar."
The Department of Energy will put out its Weekly Petroleum Status Report at 11 a.m. in Washington, a day later than usual because of the Presidents' Day holiday Feb. 15.

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Crude Oil Falls as Dollar Gains After Fed Raises Discount Rate

Feb. 19 (Bloomberg) -- Crude oil fell for the first day in four after the Federal Reserve raised its discount rate, pushing the dollar higher and damping investor demand for commodities.

Oil pared yesterday's 2.2 percent rally as the U.S. currency traded at a nine-month high against the euro. The Fed raised the rate it charges banks for direct loans for the first time in more than three years. Energy Department data showed U.S. crude inventories rose 3.09 million barrels last week, topping a forecast for a 1.73 million-barrel increase in a Bloomberg News survey.

"The decline we're seeing today is on the stronger dollar after the Fed action and the re-appearance of risk aversion," said Tobias Merath, head of commodities research at Credit Suisse Group AG in Zurich. "There is an improvement in fundamentals, but we still have an inventory overhang in oil products that's weighing on refinery margins."

Crude oil for March fell as much as $1.30, or 1.6 percent, to $77.76 a barrel in electronic trading on the New York Mercantile Exchange. It was at $78.05 at 11:58 a.m. London time.

Yesterday, the contract rose $1.73 to $79.06, the highest settlement price since Jan. 14. Futures are set for a 5.3 percent gain this week.

The dollar advanced for a third day against the 16-nation euro after the Fed raised the discount rate by a quarter point to 0.75 percent. The U.S. currency was at $1.3499 per euro at 11:59 a.m. in London, compared with $1.3527 yesterday in New York. A stronger dollar damps investor demand for commodities.

"The news from the Fed seems to have knocked the oil price off its peak," said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. "My reading of the EIA report was that it was a bit of a mixed bag and not particularly supportive of the oil price."

Price Survey

Oil may fall next week on rising U.S. inventories and speculation demand will decline next month, a Bloomberg News survey showed.

Twenty-three of 45 analysts and traders polled, or 51 percent, said prices will decline through Feb. 26. Fourteen respondents, or 31 percent, forecast a gain and eight said oil will be little changed. Last week, 50 percent of respondents predicted there would be an increase in futures.

U.S. crude inventories climbed to 334.5 million barrels in the week ended Feb. 12, the most in 10 weeks, according to yesterday's report from the Energy Information Administration, the statistical unit of the Energy Department. Total fuel consumption over a four-week period rose 0.2 percent from a year earlier to 19 million barrels a day.

Gasoline stockpiles increased 1.62 million barrels to 232.1 million, the report showed. That's the highest since March 2008, even as imports dropped and refineries produced less.

Leading Indicators

Oil reached a five-week high yesterday as the New York- based Conference Board's measure of the economic outlook for three to six months increased for a 10th month.

The series of gains in the leading indicators index is the longest since 2004. Companies stepped up production and asked employees to work longer hours to meet increased demand, which may help spur hiring in coming months.

Brent crude for April delivery fell as much as $1.33, or 1.7 percent, to $76.45 a barrel on the London-based ICE Futures Europe exchange. It was at $76.67 at 11:58 a.m. London time. Yesterday, the contract rose $1.51, or 2 percent, to $77.78, the highest settlement since Jan. 14.

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Front Month, April Crude is trading down $1.25 this morning.

Oil Falls for First Time in Six Days on Dollar, Supply Outlook
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Grant Smith

Feb. 23 (Bloomberg) -- Crude oil fell for the first time in six days as the dollar strengthened and a workers' union at Total SA said it expects to settle a dispute with the company that has halted some refineries in France.

U.S. crude supplies probably grew for a fourth week and gasoline inventories may have risen from their highest in almost two years, according to a Bloomberg News survey of analysts before tomorrow's Energy Department report. A union representing Total SA workers said some of the company's French refineries have been halted by a strike. An official for the union said he was confident the dispute would be resolved today.

"It's only a matter of time before Total and the unions settle the strike and the market goes down again," said Andy Sommer, an analyst at Elektrizitaets-Gesellschaft in Dietikon, Switzerland. "Expectations of higher inventories are the main driving force. Refinery runs are still very, very low."

Crude oil for April delivery declined as much as $1.91, or 2.4 percent, to $78.40 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $78.65 a barrel at 12:01 p.m. London time. Futures reached a 15-month high of $83.95 a barrel on Jan. 11.

Yesterday, the March contract rose 0.4 percent to $80.16 before expiring at the close of floor trading.

The commodity fell as the dollar pared losses against the euro, making crude less appealing as a hedge against inflation. The U.S. currency was at $1.3573 per euro at 11:41 a.m. in London from $1.3596 yesterday in New York.

'Bearish Signal'

"Given the fundamentals, they don't justify crude prices above $80 a barrel," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "The trend in gasoline stocks has got to levels that are a lot higher in the U.S. than can be explained by a seasonal stock increase, and it probably is another bearish signal for the oil price."

U.S. crude supplies probably increased a fourth week, according to a Bloomberg News survey of analysts. Commercially held stockpiles rose 1.9 million barrels in the week ended Feb. 19, from 334.5 million, based on the median of nine estimates. Gasoline inventories are expected to have added 1 million barrels from 232.1 million, the highest level since March 2008.

Total, Europe's largest refiner, has reported "sporadic" shortages at some gasoline filling stations in France. The strike started Feb. 17 in an effort to secure jobs for workers at an idled plant near Dunkirk.

South Korea, Asia's fourth-largest oil importer, consumed more fuel for a fourth month in January. The country used 69.3 million barrels of refined products last month, up 2.5 percent from a year earlier, data from state-run Korea National Oil Corp. showed.

Brent crude oil for April settlement was at $77.01 a barrel, down $1.60, at 12:01 p.m. on the ICE Futures Europe exchange in London, after falling as much as $1.87, or 2.4 percent. The contract yesterday rose 0.5 percent to $78.61, the highest settlement since Jan. 12.

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The eia/doe Crude and products inventory comes out today.

Crude Oil Is Little Changed in New York Before Inventory Report


Feb. 24 (Bloomberg) -- Crude oil was little changed, after falling before a U.S. government report that may show stockpiles of crude rose last week.

The Department of Energy's weekly report on inventories later today may show crude oil stockpiles rose for a fourth week, according to analyst estimates. U.S. crude inventories have risen about 2 percent since the beginning of this year.

"Fundamentals are still weak in terms of demand," said Kaha Kiknavelidze, a managing partner at London-based Rioni Capital Partners LLP, which specializes in emerging markets.

Crude oil for April delivery was at $78.97 a barrel, up 11 cents, at 1:30 p.m. London time after falling as much as 61 cents, or 0.8 percent, to $78.25 a barrel in electronic trading on the New York Mercantile Exchange.

The U.S. Department of Energy report, released in Washington at 10:30 a.m. local time today, will show crude stockpiles rose by 1.9 million barrels, according to the median of 17 estimates in a Bloomberg News survey.

U.S. gasoline stockpiles, which are up 5.6 percent so far this year, may also have risen again last week, according to the same survey. Gasoline stockpiles have risen the past two weeks.

A separate industry report yesterday from the American Petroleum Institute showed the biggest weekly decline in two months. Crude inventories fell 3.14 million barrels last week, the API said.

Brent crude for April settlement traded at $77.29 a barrel, up 4 cents, as of 1:30 p.m. on the ICE Futures Europe exchange in London. The contract earlier fell as low as $76.63 a barrel.

Total SA, Europe's largest refiner, expects to sign an agreement with unions today to end a weeklong strike that's hobbled operations at its refineries in France. Fuel shipments and the restart of refinery units will begin "very quickly," Christian Coste, a representative of the main Confederation Generale du Travail union, said by telephone.

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Front Month April Crude is trading down $1.775 at $78.225, Gasoline at the pump should pull back some in the near term, and front month April Natural gas is trading down $0.02 at $4.835. Eia/doe gas storage report comes out today.


Crude Oil Futures Extend Declines After U.S. Economic Reports


Feb. 25 (Bloomberg) -- Crude oil declined, extending earlier losses after U.S. economic reports increased concerns that the economic recovery in the world's biggest energy- consuming nation may stall.

Crude oil for April delivery fell as much as $1.55, or 1.9 percent, to $78.45 a barrel in electronic trading on the New York Mercantile Exchange. It was at $78.81 a barrel at 1:44 p.m. London time.

Unemployment claims in the U.S. increased more than forecast last week, Labor Department figures showed today in Washington. January orders for durable goods excluding transportation equipment, as reported today by the U.S. Commerce Department, fell short of estimates.

"There is a lack of conviction as to where the global economy is going," said Paul Harris, head of natural resources risk management at the Bank of Ireland in Dublin.

Oil closed up 1.5 percent yesterday at $80 a barrel after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is in a "nascent" recovery that requires low interest rates to encourage demand from consumers and businesses. The Dow Jones Industrial Average closed up 91.75 points, or 0.9 percent, yesterday after Bernanke's address.

The U.S. Department of Energy released its weekly report on inventories yesterday. It showed that U.S. crude supplies gained 3.03 million barrels last week to 337.5 million, the highest since November. Stockpiles were forecast to increase 1.9 million barrels, in a Bloomberg News survey of analysts.

Brent crude for April fell as much as $1.49, or 1.9 percent, to $76.60 a barrel on the ICE Futures Europe exchange in London. It was at $76.93 a barrel at 1:44 p.m. local time.



Last Updated: February 25, 2010 08:58 EST

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Front Month April Crude is trading at $81.85, up $0.35, crude has traded as hig as $82.40 in overnite trading.    See the article below on crude oil price trend.



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