Better Fill up today

[frawin]

Oil Rises to Six-Month High on Forecasts U.S. Stockpiles Shrank



May 20 (Bloomberg) -- Oil rose to its highest in six months before a report forecast to show that U.S. crude inventories dropped from their highest level in nearly 19 years.

Crude-oil stockpiles probably dropped 1.15 million barrels in the week ended May 15 from 370.6 million the previous week, according to the median of 12 estimates by analysts before an Energy Department report today. Yesterday, the industry-funded American Petroleum Institute reported a decline of 4.47 million barrels for the period. Gasoline advanced after a fire at a Texas refinery curbed fuel production.

"Data from the Energy Department might be supportive today after yesterday's positive surprise from the API," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "But the real issue is that world financial markets are not afraid of anything, and oil prices are rising with them."

Crude oil for July delivery rose as much as 65 cents, or 1.1 percent, to $60.75 a barrel on the New York Mercantile Exchange. That's the highest price for the contract nearest to expiry since Nov. 28. It traded at $60.71 a barrel at 10:40 a.m. London time. Prices are up 36 percent this year.

Yesterday, the June contract gained 1.1 percent to $59.65 in its final day before expiry.

The catalytic cracker caught fire at Flint Hills Resources LLC's Corpus Christi plant, according to preliminary reports from the Texas environmental agency. A catalytic cracker is used to make higher-value products such as gasoline and diesel.

The API collects inventory data on a voluntary basis from refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department.

Lower Imports

Crude-oil stockpiles probably dropped 1.15 million barrels in the week ended May 15 from 370.6 million the previous week, according to the median of 12 estimates by analysts before an Energy Department report today. The Energy Department is scheduled to release its weekly report on supplies at 10:30 a.m. in Washington.

The American Petroleum Institute said yesterday that U.S. crude inventories dropped 4.47 million barrels to 366.2 million barrels last week.

Oil-supply totals from the API and DOE moved in the same direction 75 percent of the time over the past four years, according to data compiled by Bloomberg.

Inventories may fall as oil imports to the U.S., the world's biggest crude user, decline. Supplies brought into the country fell 12 percent to 8.71 million barrels a day in the week ended May 8, the lowest since the week ended Sept. 12, the Energy Department said on May 13.

Crude oil supplies climbed to 375.3 million barrels during the week ended May 1, the highest since September 1990, according to the department.

U.S. gasoline inventories dropped 5.4 million barrels to 206.2 million barrels, the API said.

Refinery Rates

The Energy Department report will probably show U.S. refineries operated at 84.1 percent of capacity last week, up 0.4 percentage point from the previous week, according to the median of responses in the survey. Refinery operations usually climb for the peak gasoline-consumption period, which lasts from the Memorial Day weekend in late May to Labor Day in September.

Sunoco Inc. shut a gasoline-making unit at its Marcus Hook, Pennsylvania, plant following a fire. Valero Energy Corp's Delaware City, Delaware, plant released sulfur dioxide from its fluid catalytic cracking unit yesterday, according to a filing with Delaware state regulators.

Gasoline for June delivery gained 3.5 cents to $1.8475 a gallon in New York on the Nymex at 10:17 a.m. London time. Yesterday it rose 3.1 percent to $1.8125, the highest settlement since Oct. 14.

Brent crude for July settlement was at $59.26 a barrel, up 34 cents, on London's ICE Futures Europe exchange at 10:16 a.m. London time. It rose 45 cents, or 0.8 percent, yesterday to $58.92, the highest settlement since Nov. 10.

[larryJ]

Thanks for the good wishes for the kids.  As of now they have been staying on an island near Thailand and will travel shortly to Bankock to visit some friends.  I am finding out that my daughter-in-law has friends and relatives all over the world.  Relatives because she is Chinese and friends because her job took her all over the world on business. 

As for other countries, my distaste was from seeing a different cultures way of living.  Seeing meat hanging in the store window without refrigeration covered by insects and people "doing their bodily fluid disposal" in the gutters and people laying drunk in the middle of the road really turned me off.  You are so right in that we have the best there is and I hope and pray we can keep it that way.

Larryj

[frawin]

Larry my sentiments exactly. On my first trip to India, I worked in South India, I noticed all of the people , men included , wearing their dress type coverings, I asked the driver that picked me up at the airport why , he said you will see.  Well I did, people, men and women just squatted whereever they were and went to the bathroom, stood up and walked off. I had a driver that picked me up every morning and drove from the hotel to the office where I worked and people were squatted along the roads everywhere going to the bathroom. Nigeria was just as bad, in the main Airport in Lagos the bathroom was a concrete trench in the open, and people just walked up, and went to the bathroom, everyone men and women alike. The trench had water running in it to keep it somewhat clean. America is the greatest nation on earth, and as Lee Greenwood would say, "I am Proud to be an American", "GOD BLESS THE USA".

[Diane Amberg]

As much as I love to travel, there are places I would never go unless on a supervised tour or with friends who knew the area well. Vaccines or not, some of the sanitation issues are just too much for me.                 

[frawin]

As much as I love to travel, there are places I would never go unless on a supervised tour or with friends who knew the area well. Vaccines or not, some of the sanitation issues are just too much for me.   
             

Diane, I understand, before we went out of the states on trips, we had to go to the company medical center, they checked your shots, gave you any you needed and then gave you a medical kit that was prepared based on the country ypou were going to. I remember on one trip to Nigeria I had to take another Smallpox shot, I told the Dr that I had mine when I started to the first grade and thought that was good for life, they still made me take a booster shot, also I had to take Cholerea shots before going to Nigeria. The biggest problem was Dysentery, on one trip I lost so much weight my wife was shocked when I got home. In Nigeria I ate boiled rice, nothing else with it, and drank hot tea, with sugar,  3 times a day. I know on one trip to Mexico the Medical center told me not to eat the fresh salads, that the water and the handling carried big germs and the fresh salad was the worst thing you could eat, along with the meats.

[Diane Amberg]

 Mexico, no fresh anything and we even had "electrocuted" water to brush our teeth, no ice either unless the water was "made" on the premises. The hotel zone on Cancun was fine, but anywhere on the mainland we had to be careful. When we went to Chitzen Itza, the local vendors had the most beautiful fruit and juices ....couldn't touch it. The same in Tiajuana and Juarez.

[frawin]

Oil Falls From Six-Month High After Fed Warning on U.S. Economy



May 21 (Bloomberg) -- Crude oil fell from a six-month high after the Federal Reserve said that recovery may fail to take root in the U.S., the world's largest energy consumer.

Oil and equities declined after minutes of the Federal Open Market Committee meeting on April 28 and 29 showed that policy- makers see "significant downside risks" in the economic outlook. U.S. daily fuel demand in the four weeks ended May 15 fell 7.6 percent from a year earlier, an Energy Department report showed yesterday.

"The market has been getting overheated," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "The demand picture hasn't justified the recent gains, and now that equity markets are pulling back traders are taking profits in oil."

Crude oil for July delivery dropped as much as $1.48, or 2.4 percent, to $60.56 a barrel, and was at $60.69 on the New York Mercantile Exchange at 11:07 a.m. in London.

Stocks in Europe and Asia retreated and U.S. index futures dropped. The MSCI World Index fell for the first time in four days, losing 0.6 percent at 9:47 a.m. in London, while futures on the Standard & Poor's 500 Index slipped 0.6 percent.

Crude oil may be poised to fall further, based on technical indicators used by traders. The 30-day relative strength index climbed to 60.58 today. The last time it was near this level, at 60.90 on July 14, the oil price started a 22 percent drop from $145.18 a barrel to $112.87 on Aug. 18.

No Improvement

"We really haven't seen any improvement in demand," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "I just don't think the fundamentals of the oil market can support prices up around the early $60s."

U.S. refineries operated at 81.8 percent of capacity, down 1.9 percentage points from the prior week, the Energy Department report showed.

Flint Hills Resources LLC planned to restart a gasoline- making unit at the Corpus Christi, Texas, refinery yesterday after shutting down the unit a day earlier because of a fire.

Federal Reserve officials, while noting possible signs of "stabilization" in the U.S. economy, signaled they're not convinced those improvements will persist.

Policy makers saw "significant downside risks" to the economic outlook, with the global financial system still "vulnerable to further shocks," according to minutes released yesterday of the April 28-29 session.

Yesterday, oil rose $1.94, or 3.2 percent, to settle at $62.04 a barrel, the highest closing price since Nov. 10, after the U.S. Energy Department said crude stockpiles dropped by 2.11 million barrels to 368.5 million in the week ended May 15. A 400,000-barrel decrease was forecast, according to a Bloomberg News survey.

Gasoline supplies plunged 4.34 million barrels to 204 million. A 1.2 million-barrel drop was forecast, according to the median estimate of 15 analysts surveyed by Bloomberg News.

Brent crude for July settlement fell as much as $1.44, or 2.4 percent, to $59.15 a barrel on London's ICE Futures Europe exchange.

[frawin]

Oil Rises as Dollar Drop Spurs Investor Demand for Commodities


May 22 (Bloomberg) -- Crude oil rose in New York and was poised for an 8.9 percent gain this week as the dollar fell to a four-month low against the euro, drawing investors to crude as an inflation hedge.

Oil was also lifted by a report showing an index of leading U.S. economic indicators increased 1 percent April, raising expectations that fuel consumption will increase. The dollar declined on speculation the U.S. government's creditworthiness is weakening, sapping demand for the currency.

"Today it's the U.S. dollar movement and risk appetite at play," said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. "The market has got ahead of fundamentals, but as long as sentiment and risk appetite remain positive, prices might go higher."

Crude oil for July delivery rose as much as 77 cents, or 1.3 percent, to $61.82 a barrel in electronic trading on the New York Mercantile Exchange. It was at $61.71 a barrel at 11 a.m. in London.

Demand for commodities as an alternative investment increases as the dollar drops because oil and gold traditionally hold their value against the falling currency. The dollar fell to $1.3955 per euro as of 8:46 a.m. in London after reaching $1.3979, the lowest since Jan. 5. Crude prices were 80 percent correlated with the decline in the dollar against the euro since the beginning of the year, according to Bloomberg data.

'Start to Panic'

"You've still got some funds that are underweight oil and as the price rallies, they start to panic, and they buy in and push the price up even more," said Jonathan Kornafel, a director at options traders Hudson Capital Energy in Singapore.

The Organization of Petroleum Exporting Countries may keep output quotas unchanged for a second time this year as recovering oil prices reduce the need for new supply cuts, according to a Bloomberg survey. The group will maintain a production target of 24.845 million barrels a day when it meets May 28, according to 25 of 27 analysts surveyed. OPEC agreed last year to three production cuts to bolster prices.

"The global economy isn't very good right now, and that is not a situation for OPEC to cut production," said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge in Tokyo. "They have to keep the levels at the moment."

Nigeria's oil production has fallen to less than half its capacity as fighting against rebels in the Niger River delta escalates.

Africa's Biggest Producer

The West African nation, formerly the continent's biggest producer, now pumps about 1.6 million barrels a day, compared with capacity of 3.2 million, Petroleum Minister of State Odein Ajumogobia said yesterday.

Brent crude for July settlement rose as much as 82 cents, or 1.4 percent, to $60.75 a barrel on London's ICE Futures Europe exchange. It was at $60.49 a barrel at 11 a.m. in London.

Crude oil futures may decline as the global economic contraction reduces fuel demand in the U.S., Europe and Japan.

Fifteen of 36 analysts surveyed by Bloomberg News, or 42 percent, said futures will fall through May 29. Fourteen respondents, or 39 percent, forecast that oil prices will rise and seven said the market will be little changed. Last week, 60 percent of analysts said prices would decline.

[Diane Amberg]

If I remember correctly, Canada is not an OPEC country.I know you said we get as much Canadian oil as will fit in the pipes. I wonder how that affects our oil prices when mixed into the averages? Do they set their own prices separately or just do what ever OPEC does?

[frawin]

Canada is our most stable and secure supply. The Canadian Crudes are priced in various ways but mainly like all crudes it is based of off Nymex pricing, less agreed Quality and Location differentials .