Latest WTI Oil Price

US Light crude oil futures for June 2012 delivery was trading at $96.27 a barrel, 17.17 GMT today in trading on the NYMEX.

US Oil Inventories Rise

A weekly report from the US API (American Petroleum Institute) yesterday showed that US crude oil stockpiles rose by 7.78 million barrels to 378.2 million last week, however oil futures pared some losses after government data showed a bigger than expected drop in US fuel stockpiles.

But actual US crude oil inventories, however, rose 3.7 million barrels. Analysts had expected a smaller build of 2 million barrels.

Oil inventories remain at their highest level since 1990, amid weak demand and steadily rising production. Meanwhile, inventories at the US oil hub of Cushing, Okla., rose 1.1 million barrels to a record 44.1 million barrels, the EIA said on Wednesday afternoon.

“We’ve gotten build after build after build after build” in inventories, said Rich Ilczyszyn, chief market strategist at iiTrader in Chicago. “We know demand is waning a bit. We know that China is not firing on all cylinders.”

WTI oil prices remained firmly lower, extending the steepest sell off in crude this year. The last time NYMEX crude fell six sessions in a row was way back in January 2011 and prices could well fall further still.

“With oil price momentum heavily skewed to the downside, we look for the market to be highly sensitive to any crude stock builds larger than 3 million barrels.” US consulting oil firm Ritterbusch & Associates said in a note.

A separate report indicated Chinese manufacturing may shrink for a sixth month. China is the world’s second biggest oil consumer, after America.

Latest WTI Oil Price

US Light crude oil futures for June 2012 delivery was trading at $103.21 a barrel, 09.23 GMT today in electronic trading on the NYMEX.

“Negative data from China is contributing to oil’s weakness today.” said Christopher Bellew, a senior broker at Jefferies Bache Ltd.

Meanwhile, China’s imports of crude oil from Iran fell 54 percent in March from a year earlier to 1.08 million metric tons, according to data released today by the General Administration of Customs.

Chinese Manufacturing Data

The early focus in markets was on manufacturing data in China, where the preliminary HSBC Manufacturing Purchasing Managers Index showed a rise to a two month high of 49.1 in April compared with a final reading of 48.3 in March. Despite the improvement, the sector was in contractionary territory for the sixth straight month.

Standard Chartered economist Lan Shen said that while manufacturing activity accelerated in April, “the employment index rose only marginally from March, so this will add to concerns about a slowdown and employment problems.” This means China is likely to take more steps to loosen monetary policy and also provide fiscal stimulus, she said.

Asian stock markets briefly turned positive, but soon gave up gains as investors digested the implications of the data.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $102.76 a barrel, 07.53 GMT today in electronic trading on the NYMEX.

US Oil Inventories

US oil inventories rose by 3.856 million barrels nationwide last week, well beyond the 900,000 barrel rise that analysts expected, according to Wednesday’s data from the US EIA (Energy Information Administration).

US crude oil stocks of 369 million barrels stand at an 11 month high and boast the biggest surplus to the five-year average for this time of year in 22 months, EIA data show.

Some traders said most of the build occurred on the relatively isolated West Coast, but others said a significant build at Cushing, Okla, the delivery point for the benchmark NYMEX crude oil, spurred the drop in prices.

Cushing stocks topped the year earlier level for the first time since last 2011, and hit an 11-month high, ahead of the planned reversal next month of the Seaway pipeline.

That move, which will allow crude to move out of landlocked Midwest terminal to refineries on the Gulf Coast, will create more competition with foreign crudes, and North Sea Brent, the European benchmark, has been feeling the pressure. In late trading Wednesday, ICE Brent crude for June delivery was at its lowest price since mid-February.

Oil Price Spread

US WTI crude oil for May delivery settled yesterday’s trading session 1.5 percent, or $1.53 lower, at $102.67 a barrel. Front month ICE Brent crude for June delivery settled 81 cents lower, at $117.94 a barrel, its lowest price since Feb. 13.

Brent’s premium to the US WTI crude oil was $15.30 a barrel at Wednesday’s settlement, up from $14.58 a day earlier, which was the lowest since Feb. 1. In early April, with Brent oil prices were trading near $125 a barrel, the premium neared $21 a barrel to WTI oil.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $104.23 a barrel, 08.01 GMT today in electronic trading on the NYMEX.

Weekly US API Figures

The US API (American Petroleum Institute) said late Tuesday that US crude oil inventories rose 3.4 million barrels last week while analysts surveyed had predicted an increase of 400,000 barrels.

Inventories of gasoline fell 2.6 million barrels last week while distillates tumbled 2.4 million barrels, the API said. The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.

“We look for a sizable US crude supply surplus during the coming months to take some steam out of crude strength. We still see fresh lows to below the $100 mark by next week.” energy trader and consultant Ritterbusch and Associates said in a report.

Seaway Pipeline Reversal

US WTI crude futures settled up 1.2 percent yesterday as investors looked to a coming pipeline reversal that is expected to bring US oil in line with global prices.

The Seaway pipeline reversal, designed to help ease a supply glut in Cushing, Okla., that has been depressing US oil prices, will begin delivering crude to the Gulf Coast refinery belt in a month, or two weeks earlier than expected.

Traders said the move will unlock the value of the landlocked US benchmark, by making the crude available to Gulf Coast refineries. At the same time, the move cuts the value of the European benchmark, Brent crude, as competitive crudes become more plentiful in the region.

“This is all about Seaway. People are buying WTI and selling Brent.” said Tom Bentz, director at BNP Paribas Prime Brokerage, referring to WTI crude, the oil most often delivered against the NYMEX contract.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $103.13 a barrel, 07.11 GMT today in electronic trading on the NYMEX.

US Oil Inventories

The US EIA (Energy Information Administration) said US crude oil stocks rose 2.8 million barrels in the week ended April 6. Analysts ha forecast a 2.2 million-barrel growth in supplies.

Data from the US API (American Petroleum Institute) released on Tuesday reflected a 6.6 million barrel build, which had traders anticipating a potentially bearish turn in the market.

“It’s more or less a bullish number when you think about that. We’re seeing a lack of imports here.” said Carl Larry, president of advisory firm Oil Outlooks and Opinions.

Other factors have been weighing on the market, from renewed worries about European sovereign debt to a weak jobs recovery in the US and an economic slowdown in China that would reduce oil demand in the world’s second largest consuming nation.

Sub $100 Oil Prices Overrated

WTI oil prices have dropped almost $8 from late February, from almost $110 a barrel to around $102 on Tuesday, however the hopes for a continued drop in oil prices could be overrated.

A recent report has Iranian President Ahmedinijad claiming his country can easily withstand a total boycott of Iranian oil exports for more than two years if necessary, and then there is the Iran oil boycott in place to start in July, taking more than 2 million barrels a day of supply off the global market.

“At the end of the day, Iran is also worried about its exports, about being able to do business with other countries. They need to maintain their budget, otherwise they cannot survive.” said Tetsu Emori, a Tokyo based commodities fund manager at Astmax Investments.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $104.74 a barrel, 08.23 GMT today in electronic trading on the NYMEX.

US Stock Market

The Dow Jones Industrial Average closed at its highest level since 2007. On Wall Street, the Dow finished 0.4 percent firmer at 13,264.50, while, the S&P 500 climbed 0.8 percent to end at 1,419.04, its best close since May 2008.

“After a massive run, what’s better than putting a cherry on top?” said Barry James, president of James Investment Research. “When you’ve got the market running higher, it likes to keep going higher until something really takes place. From an economic standpoint, there are enough positive markers for people to say that’s OK right now.”

All 10 sectors of the S&P 500 advanced, paced by the materials and tech sectors. Oil-and-gas company Denbury Resources rose, while coal producer Alpha Natural Resources increased.

Betting On Oil

Financial speculators in the market have also begun to reduce positions. Data released Friday by the Commodity Futures Trading Commission showed money managers trimmed their net long investment in oil futures by 2.6 percent, to a notional value of $24.7 billion.

“It’s the first day of the new calendar quarter,” said Tim Evans, an analyst at Citi Futures Perspective. “Some of the long liquidation last week may have been end of quarter book squaring, and now it’s jumping right back in there. But this is not really a fundamental story; it’s just a trade flow story.”

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $106.76 a barrel, 05.56 GMT today in electronic trading on the NYMEX.

The US oil contract closed off Monday’s trading session at $107.13 a barrel, or 0.2 percent higher.

Weaker US Dollar

The ICE US Dollar Index dropped from the boundaries of the key level at 80.00 after Federal Reserve Chairman Ben S. Bernanke’s speech yesterday afternoon regarding the US labour market and the American economy as a whole were more than enough to drag the US dollar to fresh year lows and revive investors’ hopes of a third round of quantitative easing.

In trading this morning, the ICE US Dollar Index, which tracks the US dollar against six major world currencies was trading at 79.130, from the session open of 79.576.

Oil prices advanced after Bernanke’s comments that accommodative monetary policy is needed to lower unemployment, making commodities a more attractive investment.

Oil Crisis Risk

Meanwhile, IHS Global Insight’s chief economist Nariman Behravesh warned that the risk of an oil crisis is now the biggest danger facing the world’s economic growth, replacing the now diminished concern about a European financial collapse.

IHS estimates that European Brent oil prices will probably hover close to $120 a barrel this year and next, which poses no risk to growth since it’s actually lower than Wednesday’s price just over $124.

But if there’s a blockade of the Strait of Hormuz, Brent oil prices would shoot up to about $240 for a few months and US WTI oil futures would not be far behind.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $106.57 a barrel, 07.51 GMT today in electronic trading on the NYMEX.

US Oil Inventories

The US Energy Information Administration said crude stockpiles fell by 1.2 million barrels in the week ended March 16, surprising analysts that had expected, on average, an increase of 1.9 million barrels.

The US API (American Petroleum Institute) said late Tuesday that crude inventories fell 1.4 million barrels last week, breaking a two month trend of growing supplies. Analysts surveyed by Platts, the energy information arm of McGraw-Hill, had predicted an increase of 2.1 million barrels.

Summer Driving Season

Even though Libya`s oil has largely returned online after the political disruptions that took it off the market last year, and Saudi Arabia is generating its highest output in three decades, the available crude is just barely meeting demand. The summer driving season in the US, which begins in April, could put further pressure on crude oil prices.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $107.78 a barrel, 07.42 GMT this morning in electronic trading on the NYMEX.

The ICE US Dollar Index fell to a one week low yesterday as traders sold the US currency, triggering automatic sell orders for the pair that further weighed on the US dollar.

The ICE US Dollar Index, which tracks the US dollar against six major world currencies was trading at 79.830 – 07.45 GMT today, from the session open of 79.712.

“Given the dollar’s sharp run up last week, investors are paring back some of those positions. The euro has been able to sustain that $1.30 level and it looks now like there’s more upside momentum after the break of $1.32 on the upside. said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co, New York.

A weaker US dollar adds support to commodities that are priced in the currency, including oil futures.

Latest WTI Oil Price

US Light crude oil futures for April 2012 delivery was trading at $105.93 a barrel, 07.29 GMT today in electronic trading on the NYMEX.

EIA Weekly Oil Report

The US EIA (Energy Information Administration) said on Wednesday that US crude oil supplies rose 1.8 million in the week ended March 9. Analysts polled had expected an increase of 2.1 million barrels. The EIA also said gasoline stockpiles decreased 1.4 million barrels and inventories of distillates declined 4.7 million barrels.

The analysts surveyed by Platts had expected a decline of 1.4 million barrels for gasoline supplies and a decrease of 1.5 million barrels for distillates.

Bumpy Ride for Oil Prices

Meanwhile, in its monthly report on the global oil portfolio, the IEA (International Energy Agency) said oil markets face a “bumpy ride” because of current and anticipated supply disruptions amid shrinking spare production capacity in OPEC member countries, and tighter inventories in Europe and the Pacific.

The IEA left its 2012 demand projection unchanged from the month before, at 89.9 million barrels per day. It said OPEC oil supply rose by 315,000 barrels per day in February, led by a three decade peak in Saudi Arabian output, and that non OPEC supply rose at an annualised rate of 300,000 barrels per day.

Latest WTI Oil Price

US Light crude oil futures for April 2012 delivery was trading at $107.07 a barrel, 08.01 GMT today in electronic trading on the NYMEX.

US Economy

Hopes for higher crude oil consumption were lifted after data released last week showed the US economy added more than 200,000 jobs for the third straight month in February.

Meanwhile, traders are also keeping a close watch on the tense situation between major crude producer Iran and the West, analysts said.

Strait of Hormuz

Kuwaiti oil minister Hani Hussein said Iran’s threat to close the Strait of Hormuz was a major cause for concern. Any closure of the critical oil supply route through the Strait of Hormuz by Iran would last at most a few months because the international community would not allow it to continue, according to the head of ExxonMobil, the US oil group.

Rex Tillerson, chief executive of ExxonMobil has commented that if tensions with Iran over its nuclear programme rose, then oil prices would continue to go up. More dramatic moves would create greater turbulence.

The IEA has warned that if the strait was blocked that only a small share of the oil could be transported along alternative routes.

Latest WTI Oil Price

US Light crude oil futures for April 2012 delivery was trading at $106.66 a barrel, 08.01 GMT today in electronic trading on the NYMEX.

Enbridge Pipeline Fire

Enbridge has shut down a pipeline that carries oil from Canada to the US after two vehicles crashed through a fence outside Chicago and struck the pipeline, causing a fiery explosion.

Police in New Lenox say two men were killed and three others were injured in the Saturday crash.

Enbridge spokeswoman Lorraine Little said the pipeline was shut down immediately when sensors detected a drop in pressure. A second, undamaged line was also shut down as a precaution.

Little said the undamaged line has reopened, but Line 14 remains closed and she said it likely won’t be restarted until Thursday.

“Emergency crews and Enbridge crews were at the site as quickly as possible. At this time our thoughts are with the accident victims and their families,” Little said on Sunday.

The line is 60 centimetres wide and carries various grades of crude from Canada, as well as oil from North Dakota. It normally transports 317,000 barrels per day.

Canadian crude oil is already heavily discounted to the United States WTI benchmark. On Wednesday, Canadian Heavy crude was bid at $35 under WTI while sellers were looking for $30 under. WTS is trading at about a $25 premium to Canadian crude, according to recent data.

Midwestern US oil refineries have been running at record high levels to take advantage of the price advantage of landlocked WTI and sharply discounted Canadian grades.

Latest WTI Oil Price

US Light crude oil futures for April 2012 delivery was trading at $107.05 a barrel, 06.00 GMT today in electronic trading on the NYMEX.

Rising inventories have done little, however, to blunt the recent runup in oil prices. Benchmark Light crude on the NYMEX rose 9 percent in February, climbing to a nine month high of nearly $110 a barrel last week, in a rally driven largely by tensions with Iran.

Most of the gains came during the final few minutes of trading in New York. Traders said concerns about a supply disruption from Iran continue to weigh on the market and have left traders wary of placing bets on lower prices, despite rising inventories in the US.

“There’s still a lot of fear in this market when it comes to the geopolitics. People don’t want to be short, or they continue to speculate that something’s going to happen on the Israel Iran front.” said Jaya Bajpai, managing director of Trajan Investment Management.

US crude oil stockpiles have risen almost 5 percent year to date, underscoring the rising availability of oil and tepid US demand.