Better Fill up today

[frawin]

Jan-10 Crude oil is trading at $78.00, down $0.375, Jan-10 Natural Gas is trading at $4.71, down $0.05.

[frawin]

Crude Oil Falls as Growing Supply Dampens Recovery Outlook



By Grant Smith and Ben Sharples

Dec. 2 (Bloomberg) -- Crude oil fell after an industry report showing an increase in U.S. supplies reinforced speculation that fuel demand will be slow to recover.

The American Petroleum Institute reported crude inventories rose 2.89 million barrels last week, while gasoline and distillate fuel stockpiles also climbed. The U.S. Energy Department will release its report today. Ministers from Iran, Nigeria and Kuwait have indicated the Organization of Petroleum Exporting Countries will keep supply quotas unchanged at their Dec. 22 meeting.

"Eighty-dollars is proving a tough nut to crack, and last night's stats put paid to any further testing of the resistance there," said Christopher Bellew, senior broker at Bache Commodities Ltd. "There doesn't seem any shadow of doubt that OPEC will leave quotas unchanged, and that'll keep prices range- bound until the meeting."

Crude oil for January delivery declined as much as 56 cents, or 0.7 percent, to $77.81 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $78.02 at 10:16 a.m. London time. Prices have gained 74 percent this year.

Crude gained yesterday after reports yesterday showed signs of increased manufacturing output in the U.S. and China, responsible for about 32 percent of global oil consumption.

The U.S. Energy Department will release its weekly supply report today in Washington. Inventories are forecast to decline, according to a Bloomberg News survey.

Energy Department

The Energy Department report is forecast to show that crude inventories fell 450,000 barrels, according to the survey. Oil- supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.

"What is really important now is for industrial production in the U.S. to come back online," Ben Westmore, an analyst with National Australia Bank in Melbourne, said by telephone. "Compared to the last 20 years, distillate stocks are still pretty much the highest they've been."

Inventories of distillate fuels, which include heating oil and diesel, rose 1.06 million barrels to 168 million, the API report showed. The Energy Department will probably say stockpiles fell 350,000 barrels last week, according to the Bloomberg News survey. Supplies are at 166.9 million barrels, the highest since January 1983.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Yachtsmen Released

Five British yachtsmen detained by the Iranian navy in the Persian Gulf last week were released today, state-run media reported. Oil prices dropped about 50 cents a barrel after the news of the release.

Iran's Revolutionary Guards Corps said that on questioning the sailors, it was clear they had entered Iranian waters by mistake, the Fars news agency reported.

Brent crude oil for January settlement was at $79.14 a barrel, down 21 cents, on the London-based ICE Futures Europe exchange at 10:17 a.m. London time.

[frawin]

I thought this might be of interest to some of you. This is the weekly DOE/EIA Petroleum Inventory report. It is easy to see from this why more refineries are shutting down.

Summary of Weekly Petroleum Data for the Week Ending November 27, 2009

U.S. crude oil refinery inputs averaged 13.8 million barrels per day during the
week ending November 27, 127 thousand barrels per day below the previous week's
average. Refineries operated at 79.7 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 9.0 million barrels
per day. Distillate fuel production decreased last week, averaging 3.9 million
barrels per day.

U.S. crude oil imports averaged 8.4 million barrels per day last week, down 549
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.6 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 1.1 million barrels per day. Distillate fuel imports
averaged 136 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 2.1 million barrels from the previous week. At
339.9 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 4.0 million barrels last week, and are above the upper limit of
the average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories decreased by 1.2
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories decreased by 0.9 million
barrels last week and are in the lower half of the average range. Total
commercial petroleum inventories increased by 5.5 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 18.5
million barrels per day, down by 3.2 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 9.0
million barrels per day, up by 0.7 percent from the same period last year.
Distillate fuel demand has averaged 3.6 million barrels per day over the last
four weeks, down by 7.7 percent from the same period last year. Jet fuel
demand is 0.1 percent higher over the last four weeks compared to the same
four-week period last year.

[frawin]

Jan-10 Crude settled at $76.60, down $1.77 on the day, Jan-10 Natural Gas settled at $$4.53 down $0.232 on the day.

[frawin]

Jan-10 Crude oil is trading at $77.10, up $0.50, Jan-10 Natural Gas is trading at $4.545, up $0.015.
Natural Gas Storage Report comes out today, it will be interersting to see if we have the first draw down of the 2009-2010 winter season.

[frawin]

Oil Rises Above $77 as Hedging Demand Overrides Supply Concern



By Grant Smith

Dec. 3 (Bloomberg) -- Crude oil rose above $77 a barrel in New York as the dollar weakened, spurring investor demand for commodities to hedge against inflation.

Oil rebounded after losing 2.3 percent yesterday as the U.S. Energy Department reported that crude stockpiles swelled to their highest level since August. The dollar slipped as indications the global economy is recovering stimulated demand for higher-yielding assets.

"The dollar is the single most important factor in the market," said Eugen Weinberg, senior commodities analyst at Commerzbank AG in Frankfurt. "It's not the fundamentals. The weaker dollar is a really big concern for many investors and they try to protect themselves by buying into commodities."

Crude oil for January delivery rose as much as 90 cents, or 1.2 percent, to $77.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $77.16 a barrel at 11:13 a.m. in London. Prices have gained 73 percent this year.

An Institute for Supply Management index of non- manufacturing businesses, which make up the largest part of the U.S. economy, will rise to 51.5 in November from 50.6 in October, according to a Bloomberg News survey before today's report. The U.S. currency dropped to $1.5123 per euro at 10:51 a.m. in London, from $1.5044 yesterday in New York. Gold hit a record for a third day, touching $1,226.56 an ounce.

Crude Stockpiles

Commercially held U.S. crude oil inventories rose 2.09 million barrels to 339.9 million, the highest level since August, the Energy Department report showed. Stockpiles were forecast to decline by 400,000 barrels, according to the median estimate from analysts surveyed by Bloomberg News.

Gasoline supplies climbed 4 million barrels to 214.1 million as imports hit a 14-week high, the Energy Department said. Distillate fuel inventories fell 1.17 million barrels to 165.7 million, 29.9 percent above the five-year average level.

"Demand indications for November-to-date remain firm for gasoline, greatly improved for jet, but are still very sluggish for other distillates," analysts at Barclays Capital, led by Paul Horsnell, said in a report after the Energy Department data.

Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended Nov. 27, down 3.2 percent from a year earlier, the Energy Department said. Consumption slipped by 497,000 barrels a day last week.

Rising consumption outside the U.S., particularly in China and India, may push oil prices to an average of $90 a barrel next year, compared with $61 this year, UBS AG's wealth management group told reporters today in Singapore.

Brent crude oil for January settlement rose as much as $1.03, or 1.3 percent, to $78.91 a barrel on the London-based ICE Futures Europe exchange. The contract was at $78.67 a barrel at 11:13 a.m. in London.

[larryJ]

Shutting down refineries is probably only common sense from a business standpoint.  If there is not a demand for supplies, why spend the money to keep it running.  I imagine it cost a lot to run a refinery and if there is no reason to keep it open, the company running the refinery could save a ton of money by shutting it down.  Thanks for posting.  It was an interesting article.

Larryj

[frawin]

Jan-10 Crude settled at $76.46, down $0.14 on the day, Jan-10 Natural Gas settled at $$4.459 down $0.071 on the day.

[frawin]

Jan-10 Crude oil is trading at $75.80, down $0.65, Jan-10 Natural Gas is trading at $4.545, up $0.085.

[frawin]

Jan-10 Crude settled at $75.47, down $0.99 on the day, Jan-10 Natural Gas settled at $$4.586 up $0.127 on the day.