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Goldman Sachs predicts summer oil price at $92 – $97 range

oilprices — Fri, 12 Mar 2010 14:22:38 +0000

Falling oil inventories and a 2010 recovery in oil demand will boost crude oil prices this summer, Goldman Sachs predicted today. Goldman Sachs forecasts the crude oil prices will be trading between $92 and $97 a barrel in 3 to 6 months time.

“For this time of year, OECD total petroleum inventories would need to be 100 to 150 million barrels below current estimated levels for front month to rise above second-month WTI crude oil prices,” Goldman analysts David Greely and Jeffrey Currie said in a research note.

“As inventories decline and the benefits to physical oil producers, consumers, and refiners of having oil inventories on-hand begin to outweigh their costs of storing it, they will increasingly be willing to pay to hold inventories,” Goldman said.

Goldman said it expected the oil futures curve to shift from contango into backwardation by the summer as oil stocks declined and the benefits to producers, consumers, and refiners of having inventories to hand began to outweigh storage costs.

Oil prices trading steady amid a weaker US dollar

oilprices — Fri, 12 Mar 2010 08:09:45 +0000

Oil prices were nearly unchanged in Asia trading on Friday with Light oil futures above $82 a barrel on a slightly weaker US dollar.

Light crude oil futures for delivery in April traded at $82.16 a barrel at 0650 GMT, up $0.05 on the NYMEX, while in London, April Brent crude oil futures on London’s ICE Futures Exchange rose $0.02 to $80.30 a barrel.

“The market would’ve taken a little bit of heart from the China oil data,” said Mark Pervan at Australia and New Zealand Banking Group. “We’re starting to see the market buying oil even in a rising-dollar market, which is pretty surprising and fairly encouraging.”

The US dollar fell slightly against the euro for the second straight day Thursday in quiet trading as traders awaited the release of key US retail data that could drive markets. “A stronger retail sales report would add to the upside momentum in the dollar,” said Kathy Lien, director of currency research at Global Forex Trading.

Crude oil prices near 2010 trading highs, where next?

oilprices — Thu, 11 Mar 2010 16:25:24 +0000

Crude oil prices have rallied to within sight of 2010 trading highs this week, whilst the US dollar remains strong, where next for oil prices?

The contrast between the US Light oil price, which topped $83 a barrel on Wednesday, and signs of weak physical markets might preoccupy OPEC when it meets on March 17th and raise the issue of whether markets have too much oil.

“If you get on the ground and look at the fundamentals, you see too much crude oil production by OPEC,” said Paul Tossetti, senior energy adviser at PFC Energy.

“Anybody who still believes that oil futures prices are a reflection of the true state of the physical market is living in a time warp,” said David Hufton of oil brokers PVM.

Latest data showed that US crude oil inventories climbed by 1.4 million barrels, which undershot analysts’ consensus forecast for a 1.7 million barrel gain. “It was largely positive but … you’re always going to have some profit taking especially while things in Europe and the US still look pretty sluggish,” said Ben Westmore, an energy economist with the National Australia Bank in Melbourne.

David Greely, of Goldman Sachs, anticipates global inventories will keep falling, changing price spreads and lifting crude into the $85 to $95 a barrel range in the second half of 2010.

“The increased growth in 2010 oil consumption supports a firming of crude oil prices at above $80 per barrel this summer and accommodates a further drawdown of commercial oil inventories,” the EIA said.

Oil prices unchanged amid global recovery concerns

oilprices — Thu, 11 Mar 2010 08:04:03 +0000

ICE and NYMEX crude oil prices are trading steady on Thursday amid growing questions and economic concerns over the 2010 global recovery.

Crude oil futures have traded between $69 and $84 in the first quarter of 2010, but crude oil futures have been very volatile within that range as evidence of a rebound in world economic activity clashed against oversupplied crude markets.

US Light crude oil futures for April delivery fell 52 cents to $81.57 a barrel by 0700 GMT on the NYMEX, after touching $83.03 in trading on Wednesday, while in London ICE Brent oil futures fell 48 cents to $80.00 a barrel on the ICE Futures Exchange.

“It’s been range bound volatile market, and if you get to trade on that, it’s a great way to pick up some money from moves of $3 or $4″ said Peter McGuire, managing director of Commodity Warrants Australia in Sydney. “Given that the US dollar is appreciating, they are (OPEC member countries) relatively content with what they are receiving for their oil” he added.

Arun Motianey, director of fixed income strategy at Roubini’s RBG Capital, said supercycles which feature periods of commodity booms followed by busts, and the US economy is on the verge of an inflationary period that will generate a sharp rise in prices.

“It’s going to be inflation everywhere and it’s going to happen really through the weakness of the US dollar,” he said. “Then inflation in those other parts of the world that are expecting appreciating currencies, they’re going to inflate as well because that’s the way you ultimately correct this.”

Oil trading steady, analysts say expect higher prices

oilprices — Wed, 10 Mar 2010 07:35:29 +0000

Oil prices ended Tuesday’s trading session down, but still well above the $80 mark as a stronger US dollar and higher stock markets kept oil firm.

What analysts are currently predicting about oil prices

Despite Tuesday’s decline, many analysts expect crude oil prices to continue moving higher in the months ahead as gasoline demand begins to improve.

“Our price outlook for the second half of this year remains positive with the crude oil market tightening as global demand recovers,” analysts at BofA Merrill Lynch Global Research wrote in a report.

“We currently see the crude oil market in a small deficit this year, with demand picking up particularly towards the end of the year,” the report said.

David Greely, of Goldman Sachs, anticipates global inventories will keep falling, changing price spreads and lifting crude into the $85 to $95 a barrel range in the second half of 2010.

Oil prices trading steady, next moves higher to $90?

oilprices — Tue, 09 Mar 2010 07:37:20 +0000

Oil prices have been “buoyed by continued positive macroeconomic data flow and a gradual tightening of oil market balances,” Barclays Capital said in a report. “The dominant range is moving upward, and a rough $70 to $80 range will ultimately transition to a $80 to $90 range.”

US Light crude oil futures for April delivery was down 40 cents to $81.47 a barrel at midday Singapore time in electronic trading on the NYMEX, while in London, Brent crude oil futures was down 42 cents at $80.05 on the ICE Futures Exchange.

Several Wall Street analysts say the market is poised to flip even further, with spot prices rising above longer-dated futures for the first time since mid-2008. The inverted price pattern they envisage – called “backwardation” among economists – would signal a world in which oil demand catches up with supply after a severe, recession-induced lag. This would skim excess inventories from storage terminals.

David Greely, of Goldman Sachs, anticipates global inventories will keep falling, changing price spreads and lifting crude into the $85 to $95 a barrel range in the second half of the 2010. Oil traders say a popular recent bet was “calendar spread options”, profitable if April crude loses its discount to May.

Oil prices extend gains in trading on global demand

oilprices — Mon, 08 Mar 2010 08:37:52 +0000

Crude oil prices climbed above $82 per barrel in electronic trading Monday afternoon in Asia, extending last week’s strength on an improving outlook for global demand.

Crude for April delivery climbed as high as $82.08 a barrel on Globex before edging back a bit to $81.94, still up 44 cents. “Like most other commodities, oil prices rose after U.S. non-farm payrolls surprised to the upside,” analysts at Credit Suisse said in a research note Monday. Read full story on jobs.

Oil markets managed to close the week above the $80 level, which is a “positive technical sign,” they said.

Prices last week also found support after Chinese Premier Wen Jiabao said in his report to the Chinese legislature that he would maintain an 8% growth rate for the economy this year. The positive economic outlook raised prospects for oil demand.

“In the past few days, market moves have been led by technicals,” said Tomokazu Amano, analyst at Mitsubishi Corp Futures & Securities in Tokyo.

“Now that $80 or higher is here to stay, we are seeing an influx of speculative money from funds and others.”

Money managers extended their net long crude oil futures positions on the New York Mercantile Exchange in the week to March 2, the Commodity Futures Trading Commission said on Friday.

Oil prices trading near 2010 highs on latest US jobs data

oilprices — Fri, 05 Mar 2010 19:07:45 +0000

Crude oil prices jumped higher in trading on Friday afternoon above $82 as the market got a boost from the latest US jobs data which was better than most expected, traders said.

NYMEX Light crude oil futures for delivery in April, jumped to a high of $82.07 a barrel and is currently trading at $81.86, up $1.65 from Thursday’s close, while in London, Brent crude oil futures for April was up 1.79 dollars at $80.33, after earlier touching $80.53 on the ICE Futures Exchange.

“It was the latest US unemployment numbers that really set the markets in motion,” said analyst David Jones at financial spread-betting firm IG Index.

Oil also rose sharply after encouraging news from China, which is the second biggest global energy consumer.

“Crude oil prices rose … following news that China will maintain its economic stimulus package that drove overnight gains across the Asian markets and raised hopes for a boost in crude oil demand,” said Sucden Financial Research analyst Myrto Sokou.

This years high for crude oil prices was $83.95 reached in the day’s trading for NYMEX Light crude oil futures on January 11th 2010.

Oil prices trading steady around $80, stronger US dollar

oilprices — Fri, 05 Mar 2010 07:48:57 +0000

Crude oil prices are steady in trading on Friday in Asia and are holding onto the $80 range as the US dollar benefited from doubts about whether Greece’s austerity measures aimed at slashing the country’s deficit will actually work.

Light crude oil futures for April delivery was up 53 cents to $80.74 a barrel at midday Singapore time in electronic trading on the NYMEX, while in London, Brent crude oil futures is trading at $78.48 on the ICE Futures Exchange.

The euro fell versus the dollar on Thursday as comments by the European Central Bank reinforced the view interest rates in the region will remain low in the foreseeable future.

“The market was not responding well to the positive economic reports. Now home sales data is weighing. Once again the market is in $80 to $81 range and can’t sustain a rally,” said Tom Bentz, broker at BNP Paribas Commodity Futures Inc in New York.

The market is waiting for closely watched US non-farm payroll data on Friday at 8:30 a.m. EST (1330 GMT) for any potential sign of economic recovery.

Reports of an attack on an oil facility in Nigeria gave some support to prices on Thursday, raising worries over production from the Niger Delta after a period of relative calm. A militant faction in Nigeria’s restive Niger Delta said it blew up an oil manifold operated by Italy’s Agip on Wednesday.

Oil prices trading around $80 on latest US inventory data

oilprices — Thu, 04 Mar 2010 07:47:55 +0000

Crude oil prices are trading up around the $80 plus mark on Thursday after a two day jump fueled by growing investor optimism that global crude oil demand is recovering.

US Light crude oil futures for April delivery was down 23 cents to $80.64 a barrel at midday Singapore time in electronic trading on the NYMEX, while in London, Brent crude oil futures stands at $79.09 on the ICE Futures Exchange.

The latest US inventory data released Wednesday by the Energy Information Administration was mixed, with crude and gasoline supplies rising and distillates, which include deisel and heating oil, falling. Some analysts have been expecting deisel demand to improve as the economy grows.

“The oil market is now very close to entering a new phase of price dynamics. The pressure has been building for a convincing break above 80 dollars per barrel,” Barclay Capital analysts said in a client note.

The analysts said that US official revisions of December energy data showed “a more positive dynamic in US demand” than was evident in the weekly data.

“We forecast a 150,000 barrel per day increase in overall US demand this year, but see the recent surge in Asian demand as being more important as a driver of the shift up in prices.”

Oil prices trading steady, awaits US crude inventory data

oilprices — Wed, 03 Mar 2010 07:38:27 +0000

Oil prices are hovering under the $80 mark in light trading in Asia Wednesday ahead of the weekly US inventory data and markets will be looking for confirmation of overnight data from the API that reported a surprise huge draw in distillate stockpiles, but with a higher than expected build in crude stocks. The US Department of Energy’s weekly statistics are due to be released at 1530 GMT today.

On the NYMEX, Light crude oil futures for delivery in April were 2 cents higher at $79.70 a barrel at 0624 GMT, while in London, Brent crude oil futures fell 13 cents to $78.05 a barrel on the ICE Futures Exchange.

In the backdrop of relatively small draws in the “previous three reports, yesterday’s much larger than normal draw is not unreasonable,” said Stephen Schork, editor of the Schork Report.

“Macroeconomic concerns have kept prices below $80 as recent economic data have been mixed,” Goldman Sachs said in a report.

“Without a stronger US economic pickup, it is unlikely that the developed market is going to see demand growth for crude oil,” S&P analyst Lorraine Tan said.

“As consumers in the US continue to stare down job loss and foreclosure, businesses still have a hard time obtaining credit to meet any expansion in crude oil demand, whenever it comes,” said Mike Fitzpatrick at MF Global.

Oil prices trading steady as US dollar makes gains

oilprices — Tue, 02 Mar 2010 07:52:50 +0000

Oil prices are trading steady on Tuesday in Asia as the US dollar made some gains amid European sovereign risk worries and the latest forecasts for rising US crude oil inventories capped prices.

US Light crude oil futures for April delivery rose 9 cents to $78.79 a barrel earlier this morning, while London ICE Brent climbed 11 cents to $77.00 on the ICE Futures Exchange. The front month contract for US Light crude oil futures touched $80.62 yesterday, its highest since January 13th 2010.

But oil prices retreated after the US dollar gained 0.65 per cent against a basket of currencies (the Dollar Index). On Tuesday the US dollar gained a further 0.37 per cent as concern swirled about sovereign risk issues in Europe. The Euro fell against the US dollar on Monday as uncertainty remained over a bailout package for debt strapped Greece, while Wall Street extended gains after a spurt of takeover news.

“Rising equities are being offset by a stronger dollar and the market lacks some direction right now,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

Oil prices trading back over $80 mark on higher markets

oilprices — Mon, 01 Mar 2010 06:59:28 +0000

Crude oil prices rose above $80 a barrel in trading on Monday in Asia as oil traders followed regional stock markets higher.

US Light crude oil futures for April delivery was up 56 cents to $80.22 a barrel at midday Singapore time in electronic trading on the NYMEX, while in London, Brent crude oil futures are up 54 cents at $78.13 on the ICE futures exchange.

Oil traders, who often look to equities as a measure of overall investor sentiment, were cheered by a jump in all the major Asian stock indexes Monday amid recent signs that Asian manufacturing is recovering from last year’s slump.

This week, investors will be eyeing US jobs data to get a better sense of the recovery in the world’s largest economy. The Labor Department is scheduled to announce February’s unemployment rate on Friday.

Oil prices have touched the low $80 level several times in the last six months, but fallen back into the $70s when US crude inventory data failed to justify investor optimism.

“Oil’s trading higher due to the fact that the US dollar opened a little bit weaker against the euro,” said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.