Better Fill up today

frawin · April 09, 2009, 07:33:33 AM

Oil Rises After U.S. Government Shows Smaller Gain in Supply

By Grant Smith and Christian Schmollinger

April 9 (Bloomberg) -- Crude oil rose for a second day after a government report showed a smaller gain in U.S. inventories than the industry indicated a day earlier.

Supplies increased by 1.65 million barrels to 361.1 million last week, the highest since July 1993, the Energy Department said yesterday. The industry-funded American Petroleum Institute said April 7 stockpiles jumped by 6.94 million barrels to the highest since 1990. The two reports have moved in the same direction 75 percent of the time over the last four years.

The fact that the Energy Department did not show as big a stock build made the market stronger, said Christopher Bellew, senior broker at Bache Commodities in London. Buyers had waited for the data expecting lower prices, and once it came out, people were suddenly buying at the same time.

Crude oil for May delivery rose as much as $2.08, or 4.2 percent, to $51.46 a barrel on the New York Mercantile Exchange. It was at $51.10 a barrel at 11:25 a.m. in London. Prices are up 14 percent this year.

We should continue to see this push-pull between the reality of weak demand and high inventories, and the hope that things are getting better, said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. The unexpected decline in distillate fuels also helped prices, he said.

Declining Demand

Gasoline stockpiles rose 656,000 barrels to 217.4 million in the week ended April 3. Total daily fuel demand averaged over the past four weeks was 18.9 million barrels, down 4.4 percent from a year earlier, the report showed. It was the lowest consumption for a four-week period since October.

Global oil demand falls to an annual low during the second quarter as refineries close to perform maintenance after winter in the Northern Hemisphere.

Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude oil is delivered, fell 878,000 barrels to 29.98 million last week, the lowest since the week ended Dec. 26. Supplies in the week ended Feb. 6 were the highest since at least April 2004, when the Energy Department began keeping records for the location.

The Cushing supplies are still above their average of 20.5 million barrels over the past five years. The excess in inventories has weighed on the May Nymex oil contract, which trades at a discount to the June future, a situation known as contango. The difference between the two is now at $2.48 a barrel, up from 69 cents a barrel a month ago.

Texas Discount

Brent crude oil for May settlement rose as much as $1.89, or 3.7 percent, to $53.48 a barrel on Londons ICE Futures Europe exchange.

Brent is now trading at a premium of more than $2 a barrel to the West Texas Intermediate contract in New York, swinging from a discount of 43 cents on March 31.

It makes sense that Brent is strengthening above WTI, Mitsubishis Nunan said. The U.S. is terrible right now. The overall demand is down and crude inventories are way too high.

frawin · April 13, 2009, 06:47:12 AM

Oil falls below $52 on IEA demand forecast

April 13, 2009 at 6:20 AM EDT

SINGAPORE — Oil prices fell to below $52 (U.S.) a barrel Monday in Asia after the International Energy Agency said it expects global crude demand to drop this year amid the worst worldwide recession in decades.

Benchmark crude for May delivery fell 77 cents to $51.47 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange.

The contract on Thursday rose $2.86 to settle at $52.24 a barrel. Trading was closed on Friday for the Good Friday holiday.

The Paris-based IEA, an energy policy adviser comprised of 28 countries, said on Friday that demand this year will likely fall by 2.4 million barrels a day to 83.4 million barrels, or 2.8 per cent lower than last year.

The IEA cited "a growing consensus that economic and oil demand recovery will be deferred to 2010."

R20;That's very serious demand destruction," said Victor Shum, an analyst with consultancy Pervin & Gertz in Singapore. "The macroeconomics don't look good at all for this year."

Oil prices have rallied from below $35 a barrel in February, mirroring a jump in stock markets, as investors anticipate massive global stimulus packages may spark a recovery in the second half.

R20;Investors have brushed aside near-term worries about the economy and oil demand," Mr. Shum said. "They're looking ahead to an eventual revival in the global economy."

Traders will be watching a slew of quarterly corporate results this week for signs the worst of the economic downturn is over. Banks such as Goldman Sachs Group Inc., Citigroup Inc. and JPMorgan Chase & Co. will report this week along with Intel Corp., Johnson & Johnson, Mattel Inc.

On Sunday, Iran's oil minister Gholam Hossein Nozari told state television that a price of between $75 and $80 dollars a barrel is desirable for both Tehran and oil consumers.

Iran is a member of the Organization of Petroleum Exporting Countries, which as announced production cuts of 4.2 million barrels a day since September.

R20;OPEC compliance with the cuts remains quite high, but nobody, even in OPEC, expects prices to get to $75 this year," Mr. Shum said. "In the longer-term, it will likely get there, but not this year."

In other Nymex trading, gasoline for May delivery fell 1.10 cents to $1.47 a gallon and heating oil dropped 1.35 cents to $1.42 a gallon. Natural gas for May delivery sank 4.1 cents to $3.57 per 1,000 cubic feet.

In London, Brent prices fell 38 cents to $53.68 a barrel on the ICE Futures exchange.

frawin · April 14, 2009, 06:13:03 AM

I thought this was an interesting twist in US Crude Supply.

OPEC Cuts Thwarted as Brazil, Russia Grab U.S. Market (Update1)

April 14 (Bloomberg) -- As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, sending crude back below $50 a barrel as demand slows.

U.S. imports from the Organization of Petroleum Exporting Countries fell 818,000 barrels a day, or 14 percent, to 5.02 million in January from a year earlier, according to the latest monthly report from the Energy Department. At the same time, imports from Brazil more than doubled to 397,000 and Russia's increased almost 10-fold to 157,000, a trend that continued in February and March, according to data from each country.

While the median forecast in a Bloomberg News survey of 32 analysts shows crude in New York averaging $61 a barrel in the fourth quarter, up from the second-quarter's estimate of $50, traders are increasing bets on a decline. The fastest-growing options contract on the New York Mercantile Exchange is for prices to fall below $40 a barrel by May 14.

"OPEC has done a good job keeping oil in the $50 area but they will have to cut substantially more, maybe more than they are capable of, if they want higher prices," said John Kilduff, senior vice president of energy at MF Global Inc. in New York. "You are going to hear greater calls for non-OPEC producers to cooperate and make cuts."

Imports fell by 148,000 barrels a day in January just as America's production increased by 153,000, according to data compiled by the Energy Department in Washington. More oil is flowing just as the slowing economy causes consumption to contract for the second consecutive year.

U.S. Consumption

The U.S. used an average of 18.9 million barrels a day in the four weeks ended April 3, down 4.4 percent from a year earlier, according to the Energy Department, the lowest level since October. Gross domestic product will contract by 3.8 percent in North America in 2009, the International Energy Agency said in a report April 10, dropping an earlier forecast for a recovery in the economy and oil demand in the second half of the year.

Inventories climbed 1.65 million barrels in the week ended April 3, the highest since July 1993, U.S. government data show. Supplies are 12 percent above the five-year average for the period and are the equivalent of 25.4 days of consumption, up from 22.1 days a year ago.

Open interest, or the number of outstanding contracts, on the June put option for oil to fall to $40 a barrel rose by 20 percent to 24,503 contracts in the five trading days from April 3 to April 9. A so-called put gives the owner the option to sell commodities at a predetermined price in the future. Bets that crude will drop to $45 rose by 13 percent.

Crude Below $50

Nymex futures for May delivery fell as much as 47 cents, or 0.9 percent, to $49.58 a barrel before trading at $49.62 at 10:12 a.m. in Singapore.

OPEC agreed at three meetings last year to cut output by 4.2 million barrels a day, a 14 percent reduction to 24.845 million, as prices fell from a record $147.27 on July 11. The group reduced pumping by 1.2 percent in March, according to a Bloomberg News survey of oil companies, producers and analysts. The 11 members with quotas produced 25.06 million barrels.

As shipments declined, deliveries from exporters that aren't in OPEC rose by 670,000 barrels a day in January. Russian overall exports climbed 6.3 percent in February and 2.2 percent in March, according to the Energy Ministry. Brazilian total exports more than doubled in both February and March, according to Brazil's Trade Ministry.

Russian Cooperation

Algerian Oil Minister Chakib Khelil, who held the group's rotating presidency in 2008, said March 17 that he was disappointed Russia hadn't cut production to support prices. Suppliers need prices in a $60-to-$75 range to support production of higher-cost resources, Saudi Arabian Oil Minister Ali al-Naimi said on March 16 in Geneva.

Russia also lowered export duties this month to $15 a barrel from $15.70 in March to boost exports, the IEA said in the April 10 report. Brazilian production will rise 7.2 percent in 2009 to 2.54 million barrels a day, the IEA said.

"They want to capture as much of the U.S. market as they can, as fast as they can," Robert Ebel, chairman of the energy and national security program at the Center for Strategic and International Studies in Washington, said of the non-OPEC producers. "As long as they can make some money at it, they will ship their oil here."

In January, Russia and Brazil earned $23.2 million a day in exports to the U.S., based on the $41.92 a barrel average on the Nymex that month.

U.S. Market

"Russia has been trying get a foothold in our market for a long time," said Bill O'Grady, chief markets strategist at Confluence Investment Management in St. Louis. "With both gas and oil Russia hopes to gain geopolitical leverage."

Petroleo Brasileiro SA, the state-controlled energy company, said in January that it plans to invest $174.4 billion through 2013 to boost production oil and gas production to the equivalent of 4.63 million barrels a day by 2015 from 2.40 million in 2008.

"Brazil is interesting both in the near term and long term," said Rachel Ziemba, an analyst at RGE Monitor, an economic research company in New York. "In the near term there's been a lot of production brought online. In the longer term Petrobras has one of the most aggressive investment programs in the industry."

Canceling Projects

Lower prices will hamper development of new sources. Total SA, Europe's third-largest oil company, said April 6 it may postpone an investment decision in Canadian oil sands because of costs. Chevron Corp., the world's fourth-largest energy company, delayed the start of production at three Nigerian projects and more than doubled cost estimates on some of its biggest new finds. Drilling and equipment costs remain near their 2008 peaks even as prices plunged.

The U.S. will import an average 4.57 million barrels a day from OPEC in 2009, down 7.5 percent from last year, according to the Energy Department's Annual Energy Outlook. Total imports are forecast to drop 7.3 percent this year to an average 9.02 million barrels a day.

"This is a reallocation of supply," said Francisco Blanch, head of global commodities research at Merrill Lynch & Co. in London. "The U.S. is a far off point for most of OPEC to deliver to. It's natural that with OPEC cutting back dramatically you are going to see non-OPEC pick up some market share."

srkruzich · April 14, 2009, 11:12:17 AM

Hehe, freemarket always wins out!

frawin · April 15, 2009, 06:33:02 AM

Oil Rises for the First Day in Three as Equities Pare Losses

By Grant Smith

April 15 (Bloomberg) -- Oil rose for the first time in three days in New York to trade above $50 a barrel as European stock indexes pared losses and drew investors to commodities.

Oil recovered earlier losses that were driven by forecasts that a U.S. government report will show crude stockpiles at their highest in more than 15 years. European stocks and U.S. index futures pared their declines as energy producers climbed. The MSCI World Index has advanced 21 percent since the start of March as crude has gained 25 percent.

R20;We are coming out of the darkest hole in the recession and we are going to see oil prices heading up towards the high $50s, low $60s level within the next six months," Francisco Blanch, head of global commodities research at Merrill Lynch & Co., said in a television interview.

Crude oil for May delivery rose as much as $1.38, or 2.8 percent, to $50.79 a barrel on the New York Mercantile Exchange, trading for $50.56 at 11:37 a.m. London time. It earlier fell as much as 49 cents, or 1 percent, to $48.92 a barrel.

The Dow Jones Stoxx 600 Index declined 0.2 percent to 190.62 as of 11:35 a.m. in London, having earlier dropped as much as 1.2 percent. Futures on the Standard & Poor's 500 Index were up 0.1 percent at 841.

R20;We still expect the U.S. stock market to be the intermediate price driver for most commodity complexes over the next few weeks," Edward Meir, an analyst with MF Global Ltd. in Connecticut, said in a report dated today.

Inventory Forecast

Crude-oil stockpiles rose 1.75 million barrels in the week ended April 10 from 361.1 million the previous week, the highest level since July 1993, according to a Bloomberg survey before today's Energy Department report.

The industry-funded American Petroleum Institute, which often reports similar data to the Energy Department, said yesterday that oil inventories rose 6.51 million barrels to 371.2 million last week, their highest since 1990.

Brent crude oil for May settlement was at $52.59 a barrel, 63 cents higher, on LondonR17;s ICE Futures Europe exchange at 11:31 a.m. London time. It declined 18 cents, or 0.3 percent, to end the session at $51.96 a barrel yesterday.

The May contract expires today. The more-active June contract was at $53.57 a barrel, 64 cents higher, at 11:36 a.m. London time.

frawin · April 16, 2009, 06:39:40 AM

Oil Little Changed on U.S. Supply Surge, Chinese Slowdown

By Grant Smith

April 16 (Bloomberg) -- Crude oil traded little changed, erasing earlier gains, as crude supplies in the U.S. rose to the highest in nearly 19 years and China's economic expansion decelerated to its slowest pace in almost a decade.

Oil inventories rose by 5.67 million barrels to 366.7 million last week, the highest since September 1990, the Energy Department said yesterday. China's gross domestic product grew 6.1 percent in the first quarter from a year earlier, the statistics bureau said in Beijing today.

"Inventories are so high, not only in the U.S. but in Europe and Asia, across most products," said Andy Sommer, an analyst at Elektrizitaets-Ges Laufenburg AG in Dieikon, Switzerland. "Prices should come back down until we see real signs of demand stabilizing or decreasing inventories."

Crude oil for May delivery traded for $49.38 a barrel, 13 cents higher on the New York Mercantile Exchange as of 12:34 p.m. London time. It earlier advanced as much as 2.1 percent to $50.30. Prices are up 11 percent so far this year.

Last Updated: April 16, 2009 07:37 EDT

.

frawin · April 17, 2009, 06:33:15 AM

Oil Set for Biggest Weekly Decline Since February on Recession

April 17 (Bloomberg) -- Oil fell, poised for the biggest weekly decline since February, on concern global stockpiles are rising and as a stronger dollar dimmed commodities demand.

U.S. crude-oil inventories rose 5.67 million barrels to 366.7 million last week, the highest since September 1990, the Energy Department said April 15. The U.S. dollar gained for a fourth day against the euro, reducing the appeal of crude as a currency hedge against inflation.

We still have a picture of very low demand and a picture of stock builds, said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix Gmbh. That is why crude oil is not able to move any higher.

Crude oil for May delivery fell as much as 48 cents, or 1 percent, to $49.50 a barrel, and traded at $49.60 at 10:02 a.m. London time on the New York Mercantile Exchange. Oil has dropped 5 percent this week, set for its sharpest decline since the week ended Feb. 13.

U.S. fuel demand in the first quarter fell to the lowest for the period in 11 years, the American Petroleum Institute said in a monthly report yesterday. Deliveries of petroleum products, a measure of consumption, averaged 19.2 million barrels a day, 3.4 percent less than during the same period in 2008, the industry-funded API said.

Oil futures are up 12 percent so far this year. Crude climbed as much as 2.5 percent yesterday after the Labor Department reported that claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January. Chinese industrial production expanded by 8.3 percent in March from a year earlier, up from 3.8 percent in the first two months.

Less Bearish

Its sort of a contest between hope and reality, said Tim Evans, an energy analyst with Citi Futures Perspective in New York. A lot of these numbers that have bounced have bounced from extremely low levels, and so it only makes the markets a little less bearish.

OPEC will load about 22.2 million barrels a day in the four weeks ending May 2, down from 22.8 million a day in the month ended April 4, Oil Movements, the Halifax, England-based tanker- tracker, said yesterday in a report.

OPEC agreed at three meetings last year that the 11 members with quotas would cut output by 4.2 million barrels a day to 24.845 million. The members with production targets, all except Iraq, pumped 25.567 million barrels a day in March, according to a monthly report the organization released April 15.

West Texas Intermediate crude oil, the U.S. benchmark, will average $45 a barrel in 2009, according to a report from Moodys Investors Service. Thats down from the rating companys previous estimate that prices would average $50 this year. WTI is forecast to average $50 in 2010, down from a previous forecast of $55.

Theres potential for oil prices to slide off the current plateau and fall back to perhaps a number like $40 a barrel, just because inventories are at such an elevated level and may not have peaked yet, Citi Futures Evans said.

Brent crude oil for June settlement was at $52.82 a barrel, down 45 cents, at 9:26 a.m. local time on Londons ICE Futures Europe exchange.

frawin · April 20, 2009, 06:10:54 AM

Oil Falls as U.S. Dollar Rises to 1-Month High, Stockpiles Gain

April 20 (Bloomberg) -- Crude oil fell as a stronger dollar reduced the appeal of commodities and on concern inventories will rise as the global recession saps demand for fuel.

Oil dropped as the dollar rose to a one-month higher versus the euro, making crude less attractive as a currency and inflation hedge. An Energy Department report last week showed U.S. crude oil inventories rose to the highest since September 1990 as demand drops.

R20;The fundamentals don't support a higher oil price, demand is still weak," said Thina Saltvedt, an oil analyst at Nordea Bank AB in Oslo. "Inventories need to come down before you can expect the market to balance. The oil market seems to reacting to the dollar," she said.

Crude oil for May delivery fell as much as $2.03, or 4 percent, to $48.30 a barrel in electronic trading on the New York Mercantile Exchange. It was at $48.35 a barrel at 10:16 a.m. London time. Prices are up 9 percent this year.

The May contract expires tomorrow. The more-active June futures were down $1.70 cents, or 3.2 percent, at $50.77 a barrel.

The dollar strengthened as European Central Bank policy makers disagreed on the measures needed to combat the recession. The U.S. currency rose to $1.2964 as of 10:12 a.m. in London from $1.3044 in New York on April 17.

R20;The uncertain demand outlook is going to continue to dominate the outlook for crude," said Toby Hassall, an analyst at Commodity Warrants Australia Ltd. in Sydney. "The fundamentals really haven't shown any improvement."

Oil Prices

Oil prices around $50 a barrel will help the economy recover, according to Mohamed al-Hamli, the oil minister of the United Arab Emirates. The Organization of Petroleum Exporting Countries is concerned about oil demand uncertainty and maintaining crude prices at reasonable levels is vital, he said.

U.S. fuel demand in the first quarter fell to the lowest for the period in 11 years, the American Petroleum Institute said in a monthly report last week. Deliveries of petroleum products, a measure of consumption, averaged 19.2 million barrels a day, 3.4 percent less than during the same period in 2008, the industry-funded API said.

Brent crude oil for June settlement fell as much as $1.35, or 2.5 percent, to $52.00 a barrel on LondonR17;s ICE Futures Europe exchange. It was at $52.04 at 10:13 a.m. local time.

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

Speculative long positions, or bets prices will rise, outnumbered short positions by 4,962 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 7,531 contracts

Diane Amberg · April 20, 2009, 07:35:36 AM

A rising dollar is a good thing? I hope?....I just don't know any more.

frawin · April 21, 2009, 06:20:16 AM

Oil Rises From Lowest in a Month as Dollar Drops Against Euro

April 21 (Bloomberg) -- Oil rose from its lowest in a month as the dollar dropped against the euro, spurring demand for commodities as a hedge against inflation.

An Energy Department report tomorrow is forecast to show that crude inventories climbed from the highest level since 1990. The euro, near a five-week low against the U.S. dollar, rose as German investor confidence turned positive in April for the first time in almost two years.

This latest surge in the euro-dollar is drawing investors attention away from bearish oil market fundamentals, said Andrey Kryuchenkov, an analyst at VTB Capital in London. Prices are going to yo-yo a bit, but largely trade sideways ahead of the inventory figures.

An Energy Department report tomorrow will show that crude inventories, now at their highest since 1990, rose last week, according to a Bloomberg News survey.

Crude oil for May delivery was at $46.10 a barrel, 22 cents higher in electronic trading on the New York Mercantile Exchange at 10:35 a.m. London time. It earlier fell as much as 69 cents, or 1.5 percent, to $45.19, the lowest since March 16.

Yesterday, crude futures fell $4.45, or 8.8 percent, to $45.88 a barrel, the lowest settlement since March 11. It was the biggest drop since March 2. The May contract expires today.

The more-active June futures were at $48.74 a barrel, 23 cents higher, at 10:35 a.m. in London. The futures dropped $3.96, or 7.5 percent, to $48.51 a barrel yesterday.

The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations rose to 13 from minus 3.5 in March. Thats the first positive reading and the indexs highest level since June 2007. Economists expected a reading of 2, according to the median of 35 forecasts in a Bloomberg News survey.

The euro climbed as high as $1.2990 as of 10:08 a.m. in London from $1.2921 yesterday, and to 127.57 yen from 126.48.

Brent crude oil for June settlement was at $50.36, up 50 cents, on Londons ICE Futures Europe exchange at 10:35 a.m. local time. The contract yesterday fell $3.49, or 6.5 percent, to $49.86 a barrel.