Better Fill up today

[frawin]

Crude Oil Rises as Dollar Retreats, Spurring Commodity Buying

By Grant Smith

Jan. 21 (Bloomberg) -- Crude oil rose as the U.S. currency retreated from its highest in six weeks against the euro, spurring investor demand for dollar-priced commodities.

Oil earlier declined on forecasts a U.S. Energy Department report will probably show that crude stockpiles, 10 percent above their five-year average, increased for the 15th time in the past 17 weeks. U.S. inventories probably rose 1.5 million barrels last week, according to the median of analyst estimates in a Bloomberg News survey.

R20;WeR17;re seeing oil rebound this morning as the dollar pulls back," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "The softer dollar normally underpins commodity prices as they become relatively cheaper for foreign investors and a hedge against inflation."

Crude oil for March delivery advanced as much as $1.09, or 2.7 percent, to $41.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $41.57 a barrel at 10:58 a.m. London time.

The February contract expired yesterday, up $2.23, or 6.1 percent, at $38.74 a barrel in the biggest gain since Dec. 31. Sales volume for the contract was less than March's as traders avoided taking supplies at the Cushing, Oklahoma, delivery point for Nymex futures.

R20;Oil will not stay as cheap as it is, we believe the downward trend will turn very soon," Georg Schuh, chief investment officer of Deutsche Bank Advisors, said in a television interview in Frankfurt. "Investment demand came down with the deleveraging of many hedge funds. The long-term trend of rising demand in emerging countries, however, is intact."

Inventory Report

The dollar traded for $1.2936 per euro as of 10:30 a.m. in London, having earlier climbed to $1.2848, its strongest level against the single European currency since Dec. 9.

The Energy Department is scheduled to release its weekly inventory report tomorrow, a day later than usual because of the Jan. 19 Martin Luther King Jr. holiday.

R20;We can see oversupply in the market, it's obvious that inventories are very high," said Sintje Diek, an analyst at HSH Nordbank in Hamburg. "For the coming months, oil demand will be weak, and then recover at the end of the year."

Crude oil stockpiles at Cushing, where West Texas Intermediate traded on the Nymex is stored, climbed 2.5 percent to 33 million barrels during the week of Jan. 9, the Energy Department said last week. It was the highest since at least April 2004, when the department began keeping records for the location. Total capacity there is 47.7 million barrels, according to data from Lipow Oil Associates LLC.

Brent crude oil for March settlement traded for $43.72 a barrel, 10 cents higher on LondonR17;s ICE Futures Europe exchange as of 10:31 a.m. local time.

[Diane Amberg]

Our local gas is back up to about $1.67 or so....sigh.

[frawin]

March-09 Crude settled at $43.55, up $2.71 on the day, Feb-09 Natural Gas settled at $4.78, up $0.138 on the day.

[frawin]

March-09 Crude is trading at $44.625, up $1.075, Feb-09 Natural Gas is trading at $4.77, down $0.010.

[frawin]

Below are excerpts from the weekly EIA Crude and Products report that came out today, a day late due to the Monday holiday. Crude is trading down right now.


U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased 6.1 million barrels from the previous week. At
332.7 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 6.5 million barrels last week, and are at the upper limit of the
average range. Both finished gasoline inventories and gasoline blending
components inventories increased last week. Distillate fuel inventories
increased by 0.8 million barrels, and are above the upper limit of the average
range for this time of year. Propane/propylene inventories decreased last week
by 3.1 million barrels and are in the upper half of the average range. Total
commercial petroleum inventories increased by 11.8 million barrels last week and
are above the upper limit of average range for this time of year.

Total products supplied over the last four-week period has averaged 19.4 million
barrels per day, down by 4.7 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged about 8.9 million
barrels per day, down by 1.6 percent from the same period last year. Distillate
fuel demand has averaged about 4.1 million barrels per day over the last four
weeks, down by 2.6 percent from the same period last year. Jet fuel demand is
13.8 percent lower over the last four weeks compared to the same four-week
period last year.

[frawin]

March-09 Crude settled at $43.67, up $0.12 on the day, Feb-09 Natural Gas settled at $4.681, down $0.099 on the day.

[frawin]

March-09 Crude is trading at $42.875, down $0.795, Feb-09 Natural Gas is trading at $4.60, down $0.081.

Natural Gas Storage Report comes out today, a day late due to the Holiday.

[frawin]

Crude Oil Falls as Deepening Recession Causes Supplies to Swell

By Grant Smith and Christian Schmollinger

Jan. 23 (Bloomberg) -- Crude oil fell after U.S. stockpiles increased and data signaled the economic slump is deepening around the world.

U.S. crude inventories rose four times more than forecast to the highest since August 2007 as refineries cut operating rates, the Energy Department said yesterday. Recession in the world’s largest energy consumer has cut demand for heating and motor fuels. The U.K. economy shrank more than forecast during the fourth quarter, posting the biggest contraction since 1980.

“The market is still absorbing the picture of poor demand from the inventory data,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “Even with refiners cutting runs, product stocks are very high compared to five year-averages.”

Crude oil for March delivery fell as much as $1.74, or 4 percent, to $41.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $42.55 a barrel at 10:29 a.m. London time.

Prices are down 3.8 percent since the end of December and 51 percent lower than a year ago.

“There is a high risk that oil prices will test $30 again,” said Yingxi Yu, a commodities analyst at Barclays Capital in Singapore, said in a Bloomberg Television interview. “There is potential for going below that as demand continues to weaken and crude inventories continue to accelerate.”

Brent crude oil for March settlement fell as much as $1.34, or 2.1 percent, to $44.05 a barrel on London’s ICE Futures Europe exchange.

U.K. Economy

U.K. gross domestic product fell 1.5 percent from the previous quarter, the Office for National Statistics said today in London. Economists predicted 1.2 percent, according to the median of 33 estimates in a Bloomberg News survey. The economy has now shrunk in two quarters, the conventional definition of a recession.

China’s economic slowdown, already the deepest in seven years, is set to worsen, according to economists in a Bloomberg News survey. China is the world’s second-biggest energy user.

Gross domestic product will grow 6.3 percent this quarter from a year earlier, the survey showed. The country’s economy expanded 6.8 percent in the fourth quarter.

Supplies of crude oil in the U.S. rose 6.1 million barrels to 332.7 million last week, the highest since August 2007, the Energy Department said yesterday. Stockpiles were forecast to climb by 1.4 million barrels by a Bloomberg News survey.

Fuel consumption in the U.S., the world’s biggest oil consumer, during the four weeks ended Jan. 16 averaged 19.4 million barrels a day, down 4.7 percent from a year earlier, the Energy Department report showed.

Cushing Supplies

Supplies at Cushing, Oklahoma, where oil traded on Nymex is stored, climbed 0.7 percent to 33.2 million barrels last week, the highest since at least April 2004, when the department began keeping records for the location.

Gasoline inventories increased 6.48 million barrels to 220 million, the Energy Department said. Stockpiles were forecast to climb by 1.8 million barrels, according to the Bloomberg News survey. Refineries reduced operating rates, or runs, by 2 percentage points to 83.3 percent as fuel consumption tumbled.

The price of oil for delivery in April is $2.45 higher than for March, and December futures are up $11.13 from the front month. This structure, in which the subsequent month’s price is higher than the one before it, is known as contango, and is often an indicator of oversupply.

‘Steep Curve’

“It’s still a very steep curve,” said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne. “There’s no place to store this stuff so people are putting it into the very visible inventories.”

Companies including Citigroup Inc.’s Phibro LLC, Royal Dutch Shell Plc and BP Plc have stored oil on tankers as the contango allows them to profit from hoarding crude.

Refineries operated at 83.3 percent of capacity last week, the Energy Department report showed, the lowest for the week since 1991. Analysts forecast that there would be a 0.5 percentage point drop.

[Catwoman]

Frank, where are you???  I am missing my daily oil news fix!

[Warph]

Frank.  My ol' black buddy Slappy Monroe, came up to me today here at the 19th Hole and asked me,"Why gas be so high again, master Warph?"   "Good question Slappy," I said, "I'll check it out with Frank."   So, we want to know why we are paying $1.89 per gal. for gas at Chevron when two weks ago it was at $1.43?   I know that ol' barrel hasn't gone up much for a couple of months.... has OPEC cut prodution?  Afraid I haven't kept up with the oil situation lately.  BTW, Slappy, who has a few million and can afford to pay $10 bucks a gal., shoots in the low 70's and claims he related to Tiger's old nanny.  I think he's lying about the nanny.