Oil Prices, Oil Trading

Crude Oil Weekly Market Recap

dbecker — Fri, 12 Mar 2010 19:27:06 +0000

Crude Oil edged higher this week, rallying a little more than a dollar per barrel driven by dollar weakness, a strong equity markets. During the middle of the week, the Organization of Petroleum Exporting Countries predicted members will need to produce 28.94 million barrels a day to satisfy demand in 2010. OPEC projection is an increase of about 190,000 barrels a day more than last month’s projection. “Even taking into account the uncertainty regarding demand for OPEC crude, current OPEC production is likely to exceed market needs,” the Vienna-based secretariat said in the report.

OPEC increased its forecast for worldwide oil consumption in 2010 by 120,000 barrels a day to 85.24 million barrels a day. That represents growth of 880,000 barrels a day from 2009, 80,000 barrels a day more than it forecast last month. Consumption growth is driven entirely by developing economies and will remain sensitive to the pace of global economic recovery, according to OPEC.

On Friday, The IEA increased its estimate for world demand in 2010 by 70,000 barrels a day to 86.6 million barrels a day. That would mean a gain of 1.6 million barrels a day, or 1.8 percent, from 2009 levels, it said. Economies outside the Organization for Economic Cooperation and Development continue to lead the recovery in consumption, the IEA said.

The Department of Energy’s inventory report on Wednesday had a relatively surprising gasoline draw. Analysts on average had expected no inventory change in gasoline, and the surprise 2.9 million barrel draw is positive for future price action. Total motor gasoline inventories decreased by 2.9 million barrels last week, and are above the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week.

In addition, total products supplied (which is the demand for products) over the last four-week period has averaged 19.4 million barrels per day, up by 3.8 percent compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged 8.9 million barrels per day, up by 0.5 percent from the same period last year.

Also during the week, the Energy Information Administration’s Short Term Energy Outlook published on Tuesday shows contrasting consumption patterns for motor gasoline and distillate fuel oil. The recent economic downturn had a much smaller impact on motor gasoline consumption than on the use of distillate fuel oil. The Outlook projects that moderate growth in personal income and the rising cost of motor gasoline cost per mile will limit growth in motor gasoline consumption in 2010 and 2011. They also describe they reduction in use of public transportation decreasing by 3.8% in 2009.

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.

IEA says China oil demand increase is astonishing

oilprices — Fri, 12 Mar 2010 14:14:32 +0000

The IEA has said that China’s demand for oil jumped by an astonishing 28% in January 2010 compared with the same month a year earlier. The IEA added that demand for oil in 2010 would be underpinned by rising demand from emerging markets, with half of all growth coming from Asia.

But the IEA predicted demand in developed countries would fall by 0.3%. The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day. Oil prices are currently at their highest point for two months, with US light, sweet crude above $82 a barrel and Brent crude more than $80 a barrel.

The IEA said the high price level was due to “heightening of geopolitical tensions affecting some producing countries”, but that this had been balanced by “ample physical oil supplies”.

The Paris based IEA on Friday revised up by 70,000 barrels a day its oil demand forecast for both 2009 and 2010, saying that higher-than-expected non-OECD data largely offset persistently weak OECD readings.

“Chinese officials have made it clear that the government will continue to foster strong economic growth as long as inflation remains moderate, thus raising the possibility of potential upside sensitivity for the country’s oil demand outlook,” the IEA said.

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.

Daily oil trading report from ODL Markets

oilprices — Thu, 11 Mar 2010 10:06:15 +0000

Oil continued to trade above $80 following yesterday’s weekly inventories. Data showed that crude inventories grew, but analysts are now concerned that as the economic stimulus plans expire, we may see demand falling. Last night’s Chinese CPI data came in at 2.7% sparking inflationary fears..

Commodity	Level	Change
ICE BRENT CRUDE - APR 10	$80.19	-$0.28
ICE WTI - APR 10	$81.80	-$0.25
GASOIL – MAR 10	$660.25	-$4

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.”

IEA’s Tanaka says monthly oil forecast little changed

oilprices — Thu, 11 Mar 2010 07:52:56 +0000

The IEA’s global oil demand forecast will likely be little changed this month, as economic uncertainty in developed nations overshadows emerging market growth, Executive Director Nobuo Tanaka said.

The IEA, which advises oil consuming nations, will release its monthly report on global energy supplies and demand tomorrow in Paris. The US Energy Department and OPEC increased their estimates this week, citing demand projections based on an economic recovery.

“There is so much uncertainty about the prospect of the economy,” Tanaka said in an interview at an IHS Cambridge Energy Research Associates conference late yesterday in Houston. “Structural change is happening” along with “geopolitical risk and currency changes. Market players haven’t really determined direction yet.”

The IEA last month boosted its estimate for global oil demand in 2010 by 170,000 barrels a day to 86.5 million barrels, saying developing countries need more crude to fuel their economies. That would mean a gain of 1.6 million barrels a day, or 1.8 percent, from 2009 levels, it said.

“There is not much change in the underlying drivers in the market,” he said “The number won’t change very much.”

Brent oil price steady amid UK, EU economic concerns

oilprices — Thu, 11 Mar 2010 07:48:00 +0000

Brent oil prices are trading a steady path around the $80 mark on Thursday amid growing concerns regarding the UK and EU economic recovery plans for 2010.

“We have actually become more worried about the outlook for the global economy,” London-based Capital Economics said in a report. “The boost from policy stimulus will soon fade. The recovery looks fragile in the UK and may already have stalled in the euro zone.”

On Thursday in London, Brent crude oil futures was trading down 52 cents at $79.96 on the ICE Futures Exchange.

UK’s Gordon Brown’s attempt to persuade voters yesterday that the government is steering a successful path to recovery was immediately thrown into doubt by official figures showing a sharp fall in industrial output in January. Data from the Office for National Statistics (ONS) unveiled a 0.4 per cent drop in overall industrial activity during the month, surprising City economists who had predicted a 0.3 per cent rise.

Benjamin Williamson, economist at the Centre for Economics and Business Research said: “The latest data make for unnerving reading as we cannot tell how much of the declines in production and exports can be blamed on the bad weather at the start of the year and how much can be blamed on a further spin of the inventory cycle.”

The elusive nature of the eurozone’s economic recovery was highlighted on Wednesday as generally positive industrial production figures across the continent stood in contrast to an unexpected slump in German exports. Despite the weakening euro, exports in Europe’s largest economy fell 6.3 per cent in January on the previous month, the biggest drop in a year, according to the federal statistics office’s seasonally-adjusted figures.

OPEC says 2010 world oil demand projected higher

oilprices — Thu, 11 Mar 2010 07:37:13 +0000

World oil demand is projected to grow higher by 900,000 barrels per day in 2010, OPEC said on Wednesday, and supply is expected to increase along with the rise in demand, especially in non OPEC countries like Russia and Brazil.

OPEC member countries supply of about 35 percent of the world’s crude oil, raised its demand forecast to 85.24 million barrels per day, roughly 100,000 barrels per day higher than its February projections. It also said demand for OPEC crude was estimated at 29 million barrels a day, some 200,000 barrels per day more than its previous month’s forecast, but noted that members were still overproducing.

Describing 2009 as “the worst year in the industry in oil demand since the oil crisis in the 1980s,” the twelve member producer bloc said in its March report that global oil demand “has been highly dependent upon the world economy, supported by government led stimulus plans.”

“These stimulus plans have already done a great job of jump starting many sectors of the economy, including energy,” OPEC said, adding that “questions remain as to how long governments will be able to afford supporting their economies.”

“Should this support diminish, then world oil demand would of course be impacted,” it said, noting that a pullback from stimulus efforts in the United States, in particular, before a full recovery could have the domino effect of dampening demand growth in other regions, as well.

Daily oil trading report from ODL Markets

oilprices — Wed, 10 Mar 2010 11:03:15 +0000

Ahead of today’s weekly inventories, traders appear to have taken some of the recent profits off the table, albeit we remain above the $80 mark.

A spate of violent outbreaks in Nigeria has helped to increase concerns about supply from the African nation, but despite demand remaining sluggish, oil has rallied sharply over the past few weeks.

Commodity	Level	Change
ICE BRENT CRUDE - APR 10	$79.59	-$0.32
ICE WTI - APR 10	$81.21	-$0.30
GASOIL – MAR 10	$648.75	-$1.25

Brent oil price trading lower, has support around $80 mark

oilprices — Wed, 10 Mar 2010 07:46:17 +0000

Brent crude oil futures are trading lower in Asia on Wednesday with support around the $80 mark, prices were $79.93 a barrel on the London based ICE Futures Exchange this morning. Yesterday Brent crude dropped 0.7 percent, to settle at $79.91 a barrel.

“Growth of oil demand from developing countries should be the key to recovery of global oil demand this year because demand in the US and Europe is still quite flat,” said Gideon Lo, an analyst at DBS Vickers in Hong Kong. “Oil is likely to find a good support level at $80.”

Oil prices have jumped about 17 percent since early February 2010 on increased investor confidence in this year’s global economic growth, but crude oil demand from the US remained sluggish.

Analysts said markets awaited further signals on consumption from China, the world’s second largest oil user, whose February trade data for February is to be published today.

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.