The rupee increased by 24 paise against the dollar on Aug 5 due to gains in the stock market and oil prices falling below $120 per barrel. The currency opened higher at 42.36/38 and ended at 42.24/25, stronger than the previous close of 42.48/ 49. In the forward market, the 6-month premium closed substantially lower at 3.93 per cent (4.22) and the 12- month ended at 3.23 per cent (3.54).
Showing posts with label Oil Prices. Show all posts
Showing posts with label Oil Prices. Show all posts
Wednesday, August 6, 2008
Thursday, July 31, 2008
Rupee Appreciates Against Dollar - July 31 , 2008
The rupee appreciated against the dollar on July 30 tracking the upswing in the domestic stock market and the ease in oil prices. The rupee opened at 42.52/53 and touched an intra-day low of 42.58/59. It then gained to finally end at 42.36/37, against the previous close at 42.64/65. The rupee opened stronger with the overnight easing of global crude to $121 per barrel, against Tuesday''s $123 per barrel.
Wednesday, July 30, 2008
Oil Prices Ease On Demand Worries - July 30 , 2008
SINGAPORE: World oil prices eased in Asian trading on Wednesday ahead of a weekly US report on energy stockpiles expected to reinforce worries over slackening demand, analysts said.
New York's main contract, light sweet crude for September delivery, was 42 cents lower at 121.77 dollars a barrel after slumping 2.54 dollars to 122.19 Tuesday on the New York Mercantile Exchange.
Brent North Sea crude for September delivery eased 29 cents to 122.42 dollars after a drop of 3.13 dollars to settle at 122.71 Tuesday in London.
Prices have dropped about 17 per cent since they touched record highs above 147 dollars a barrel on July 11.
The fall is "gigantic in dollar terms," said Victor Shum, of Purvin and Gertz international energy consultancy in Singapore.
He said a stronger US dollar and worries about slackening oil demand in the United States, the world's biggest energy consumer, were behind the sharp decline in prices.
A stronger dollar makes crude oil more expensive for buyers with weaker currencies.
Shum said the oil market's bearish mood has also prompted some investors to move their funds out of oil.
The US Department of Energy was to release its weekly report on energy stockpiles in the country later Wednesday.
"I think the inventory data will continue to show a demand slowdown in the US and will likely add to the worries over a slackening oil demand," Shum said.
"Markets are finally working as they are supposed to, as higher prices inevitably act as a brake on demand," said John Kilduff, an analyst at MF Global.
Shum said the market's bearishness was demonstrated by Royal Dutch Shell's announcement on Tuesday that it was suspending some crude deliveries after militants sabotaged a pipeline in key oil producer Nigeria.
The impact of the news on pricing was minimal, Shum said. The Anglo-Dutch oil giant warned it may not be able to meet some supply contracts at its major Bonny terminal before the end of September.
It declared "force majeure" - a legal escape clause allowing producers to miss contracted deliveries because of circumstances beyond their control - for the remainder of July, August and September.
But Shum said supply-side risks from unrest in Nigeria, as well as tensions between the West and Iran over its nuclear programme, help to explain why prices had not fallen below 120 dollars.
"Prices have found a technical support at the low points of 120," he said. Another risk factor is the Atlantic hurricane season which can pose a risk to oil facilities and lasts into September, Shum said.
New York's main contract, light sweet crude for September delivery, was 42 cents lower at 121.77 dollars a barrel after slumping 2.54 dollars to 122.19 Tuesday on the New York Mercantile Exchange.
Brent North Sea crude for September delivery eased 29 cents to 122.42 dollars after a drop of 3.13 dollars to settle at 122.71 Tuesday in London.
Prices have dropped about 17 per cent since they touched record highs above 147 dollars a barrel on July 11.
The fall is "gigantic in dollar terms," said Victor Shum, of Purvin and Gertz international energy consultancy in Singapore.
He said a stronger US dollar and worries about slackening oil demand in the United States, the world's biggest energy consumer, were behind the sharp decline in prices.
A stronger dollar makes crude oil more expensive for buyers with weaker currencies.
Shum said the oil market's bearish mood has also prompted some investors to move their funds out of oil.
The US Department of Energy was to release its weekly report on energy stockpiles in the country later Wednesday.
"I think the inventory data will continue to show a demand slowdown in the US and will likely add to the worries over a slackening oil demand," Shum said.
"Markets are finally working as they are supposed to, as higher prices inevitably act as a brake on demand," said John Kilduff, an analyst at MF Global.
Shum said the market's bearishness was demonstrated by Royal Dutch Shell's announcement on Tuesday that it was suspending some crude deliveries after militants sabotaged a pipeline in key oil producer Nigeria.
The impact of the news on pricing was minimal, Shum said. The Anglo-Dutch oil giant warned it may not be able to meet some supply contracts at its major Bonny terminal before the end of September.
It declared "force majeure" - a legal escape clause allowing producers to miss contracted deliveries because of circumstances beyond their control - for the remainder of July, August and September.
But Shum said supply-side risks from unrest in Nigeria, as well as tensions between the West and Iran over its nuclear programme, help to explain why prices had not fallen below 120 dollars.
"Prices have found a technical support at the low points of 120," he said. Another risk factor is the Atlantic hurricane season which can pose a risk to oil facilities and lasts into September, Shum said.
Wednesday, July 23, 2008
Oil Prices Lower As Threat From Dolly Eases - July 23 , 2008
SINGAPORE: Oil prices eased in Asian trade on Wednesday as it looked like Hurricane Dolly would spare vital energy production facilities in the Gulf of Mexico, dealers said.
They said renewed worries about slower US growth were also weighing on prices.
In morning trade, New York's main contract, light sweet crude for September delivery, fell 23 cents to 128.19 dollars a barrel from its Tuesday close of 128.42 on the New York Mercantile Exchange.
The August contract expired Tuesday at 127.95. Brent North Sea crude for September delivery was off 25 cents at 129.30. "Oil markets believe that Dolly is now unlikely to significantly affect oil production in the Gulf of Mexico," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
Some oil drilling companies evacuated personnel from their offshore rigs as companies waited to see where Dolly would make landfall.
Around one quarter of US domestic crude production and 15 percent of natural gas output comes from the Gulf of Mexico.
Traders were also awaiting the release of the weekly US report on energy reserves later Wednesday.
Analysts polled by Platts energy information provider are expecting US crude reserves to decline by 1.9 million barrels, while gasoline stocks are likely to rise by 500,000 barrels.
The Energy Information Administration last week said crude inventories rose by 3.0 million barrels to 296.9 million barrels in the week ending July 11, confounding market expectations for a decline of 2.2 million barrels.
The weekly report on US energy reserves provides investors with clues on oil demand in the United States, the world's biggest energy user.
They said renewed worries about slower US growth were also weighing on prices.
In morning trade, New York's main contract, light sweet crude for September delivery, fell 23 cents to 128.19 dollars a barrel from its Tuesday close of 128.42 on the New York Mercantile Exchange.
The August contract expired Tuesday at 127.95. Brent North Sea crude for September delivery was off 25 cents at 129.30. "Oil markets believe that Dolly is now unlikely to significantly affect oil production in the Gulf of Mexico," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
Some oil drilling companies evacuated personnel from their offshore rigs as companies waited to see where Dolly would make landfall.
Around one quarter of US domestic crude production and 15 percent of natural gas output comes from the Gulf of Mexico.
Traders were also awaiting the release of the weekly US report on energy reserves later Wednesday.
Analysts polled by Platts energy information provider are expecting US crude reserves to decline by 1.9 million barrels, while gasoline stocks are likely to rise by 500,000 barrels.
The Energy Information Administration last week said crude inventories rose by 3.0 million barrels to 296.9 million barrels in the week ending July 11, confounding market expectations for a decline of 2.2 million barrels.
The weekly report on US energy reserves provides investors with clues on oil demand in the United States, the world's biggest energy user.
Saturday, July 19, 2008
Oil Gains A Dollar On Easing Iran Tension - July 19, 2008
LONDON: Oil prices rose a dollar on Friday, reversing a little of the sharp fall of this week. Crude had briefly touched a 6 week low earlier in the session as speculation grew of a more conciliatory tone ahead of talks between Iran and diplomats from major powers on Saturday on Tehran’s nuclear ambitions.
US light crude was $1.11 higher at $130.40 a barrel by 23:00 pm IST. It had dropped down to $128.54, the lowest since early June. London Brent crude was 91 cents up at $131.98. US crude fell $15 in the previous three days, putting it on track for its biggest weekly fall since the contract started trading in New York in 1983.
Olivier Jakob with Petromatrix said the expected US presence at the Geneva talks with Iran was a significant factor that the oil market could not ignore. “We will stay neutral on that meeting and would expect to see some book squaring ahead of it,” he said.
The US said this week it was sending an envoy to Geneva to join nuclear talks with Iran for the first time, to underline to the Islamic Republic and others that Washington wanted a diplomatic solution to the impasse.
Iranian foreign minister Manouchehr Mottaki said on Friday he saw almost no possibility of Israel or the US attacking his country over its disputed atomic programme.
The standoff over Iran’s nuclear programme has sparked speculation about a military confrontation with the US or Israel, helping to push up oil prices to above $147 last week.
A five day strike of Brazilian oil workers will end on Friday after limited disruption to production but oil workers in Brazil said they would expand a strike to all production and refining units of state-run Petrobras if they resume action. They will meet on July 25 to discuss their next move.
Sabotage attacks on oil facilities in Nigeria continue to shut nearly a fifth of output in the world’s eight largest oil exporter, cutting some production from one field as soon as output from others is restored.
US light crude was $1.11 higher at $130.40 a barrel by 23:00 pm IST. It had dropped down to $128.54, the lowest since early June. London Brent crude was 91 cents up at $131.98. US crude fell $15 in the previous three days, putting it on track for its biggest weekly fall since the contract started trading in New York in 1983.
Olivier Jakob with Petromatrix said the expected US presence at the Geneva talks with Iran was a significant factor that the oil market could not ignore. “We will stay neutral on that meeting and would expect to see some book squaring ahead of it,” he said.
The US said this week it was sending an envoy to Geneva to join nuclear talks with Iran for the first time, to underline to the Islamic Republic and others that Washington wanted a diplomatic solution to the impasse.
Iranian foreign minister Manouchehr Mottaki said on Friday he saw almost no possibility of Israel or the US attacking his country over its disputed atomic programme.
The standoff over Iran’s nuclear programme has sparked speculation about a military confrontation with the US or Israel, helping to push up oil prices to above $147 last week.
A five day strike of Brazilian oil workers will end on Friday after limited disruption to production but oil workers in Brazil said they would expand a strike to all production and refining units of state-run Petrobras if they resume action. They will meet on July 25 to discuss their next move.
Sabotage attacks on oil facilities in Nigeria continue to shut nearly a fifth of output in the world’s eight largest oil exporter, cutting some production from one field as soon as output from others is restored.
Tuesday, June 3, 2008
Exports Excel In April; Imports Get kostliyer - June 3, 2008
India began fiscal 2008-09 with an impressive 31.5 per cent growth in exports, but surge in oil prices pushed the import expansion to 36.6 per cent in April. Exports grew to $14.4 billion in April 2008-09, against $10.95 billion a year ago.Imports, fuelled by a big rise in purchase of crude oil from abroad, went up to $24.27 billion against $17.76 billion. Trade deficit widened to $9.87 billion in the opening month of the current fiscal against $6.81 billion in the same period last year.
Oil imports amounted to $8.02 billion, showing a rise of 46.2 per cent over the corresponding month last year. The export performance in April was seen as commendable in the backdrop of the impact of strong rupee on exporters margins in 2007-08 when the overall growth was limited to 23.02 per cent. While rupee started losing ground since May, the positive impact on imports could be seen in the next few months.
Saturday, May 31, 2008
Emerging Economies Have Powered Rise In Global Oil Demand
LONDON: Emerging economies have powered much of the rise in global oil demand in recent years, but record oil prices and rising inflation have started to put pressure on this last bastion of demand growth.
Some analysts are talking of oil demand in emerging markets either slowing or perhaps falling next year, as governments look to slash subsidies, raise administered fuel prices and hike interest rates to battle rising inflation.
Oil demand in developed nations has been declining for a while, and if emerging economies led by China, the Middle East and India, which have spearheaded much of the demand growth, slow consumption, a drop in global oil demand may be inevitable. “For the world as a whole, we might get negative growth next year,” said Leo Drollas, chief economist at the Centre for Global Energy Studies in London.
Global consumption expanded by 1.1 million barrels per day (bpd) in 2007, and is forecast by the International Energy Agency to rise by 1.03 million bpd this year.
Research by Deutsche Bank shows the oil demand growth rate was the highest in the past eight years in non-OECD countries with fuel subsidies. These countries account for around 25 million barrels of oil daily. “Certain non-OECD countries can no longer afford the subsidies and have therefore reached tipping point,” Lawrence Eagles at the International Energy Agency said earlier this month.
As oil prices hover near $130 a barrel, within reach of last week’s record of $135.09, signs are emerging that the burden of subsidies are getting too difficult to bear.
Taiwan, Sri Lanka and Indonesia have all cut subsidies on fuel, and India is likely to follow suit soon, as these emerging economies look to protect government budgets under severe strain from high oil prices. “Clearly sustaining subsidies at $130 oil is not the same as sustaining it at $50 or $80,” said Harry Tchlinguirian, analyst at BNP Paribas.
Analysts say China would have to double fuel prices to pass on fully costs of oil to consumers and India would have to increase prices by 50 to 60%.
As subsidies are cut and prices rise, analysts expect demand growth to slow in many of these countries, although the growth monster of them all — China — is not expected to do anything until after the Olympics. “In China, the brakes (on demand) will come on, in my opinion, after the Olympics,” said Drollas.
China has been busy stockpiling fuel to prevent shortages ahead of the Olympics, and that demand may completely go away after the games in August.
Analysts say the world’s fourth-largest economy could be forced to turn its attention to rising inflation against a backdrop of slowing global economic growth. Annual consumer price inflation accelerated to 8.5% in the year to April.
“The inflation aspect is going to be an extremely strong factor in shaping the future of oil demand indirectly through its economic consequences,” said Tchlinguirian at BNP Paribas, adding that China could let its exchange rate appreciate, hurting its exports, or raise interest rates.
And if China decides against letting its currency appreciate, opting to raise interest rates instead, it could slow down investment in fixed assets, which could also lead to a further destruction in oil demand.
Some analysts are talking of oil demand in emerging markets either slowing or perhaps falling next year, as governments look to slash subsidies, raise administered fuel prices and hike interest rates to battle rising inflation.
Oil demand in developed nations has been declining for a while, and if emerging economies led by China, the Middle East and India, which have spearheaded much of the demand growth, slow consumption, a drop in global oil demand may be inevitable. “For the world as a whole, we might get negative growth next year,” said Leo Drollas, chief economist at the Centre for Global Energy Studies in London.
Global consumption expanded by 1.1 million barrels per day (bpd) in 2007, and is forecast by the International Energy Agency to rise by 1.03 million bpd this year.
Research by Deutsche Bank shows the oil demand growth rate was the highest in the past eight years in non-OECD countries with fuel subsidies. These countries account for around 25 million barrels of oil daily. “Certain non-OECD countries can no longer afford the subsidies and have therefore reached tipping point,” Lawrence Eagles at the International Energy Agency said earlier this month.
As oil prices hover near $130 a barrel, within reach of last week’s record of $135.09, signs are emerging that the burden of subsidies are getting too difficult to bear.
Taiwan, Sri Lanka and Indonesia have all cut subsidies on fuel, and India is likely to follow suit soon, as these emerging economies look to protect government budgets under severe strain from high oil prices. “Clearly sustaining subsidies at $130 oil is not the same as sustaining it at $50 or $80,” said Harry Tchlinguirian, analyst at BNP Paribas.
Analysts say China would have to double fuel prices to pass on fully costs of oil to consumers and India would have to increase prices by 50 to 60%.
As subsidies are cut and prices rise, analysts expect demand growth to slow in many of these countries, although the growth monster of them all — China — is not expected to do anything until after the Olympics. “In China, the brakes (on demand) will come on, in my opinion, after the Olympics,” said Drollas.
China has been busy stockpiling fuel to prevent shortages ahead of the Olympics, and that demand may completely go away after the games in August.
Analysts say the world’s fourth-largest economy could be forced to turn its attention to rising inflation against a backdrop of slowing global economic growth. Annual consumer price inflation accelerated to 8.5% in the year to April.
“The inflation aspect is going to be an extremely strong factor in shaping the future of oil demand indirectly through its economic consequences,” said Tchlinguirian at BNP Paribas, adding that China could let its exchange rate appreciate, hurting its exports, or raise interest rates.
And if China decides against letting its currency appreciate, opting to raise interest rates instead, it could slow down investment in fixed assets, which could also lead to a further destruction in oil demand.
Friday, April 25, 2008
Oil Prices Fall Further
SINGAPORE: World oil prices, which had threatened to break the symbolic $120 a barrel level, fell further on Friday after a strengthening US dollar and rising US crude stockpiles prompted traders to lock in profits, dealers said.
New York's main oil futures contract, light sweet crude for delivery in June, slid 46 cents to $115.60 per barrel.
The benchmark contract closed down $2.24 at $116.06 a barrel during floor trading yesterday at the New York Mercantile Exchange.
The May contract had struck a record high of $119.90 before expiring on Tuesday.
London's Brent North Sea crude for June delivery yesterday settled $2.12 lower at $114.34 a barrel after earlier hitting a record intraday peak of $116.87.
In the foreign exchange market yesterday, the dollar gained in value against the euro amid speculation the US Federal Reserve soon might end its campaign of cutting interest rates.
The single European currency traded below $1.57 today, three days after it had crossed $1.60 for the first time.
"It seems that a larger-than-expected increase in US crude inventories during last week and a stronger dollar were good excuses for some investors to book profits," Sucden analyst Andrey Kryuchenkov said.
A stronger US currency makes dollar-priced crude more expensive for foreign buyers, tending to discourage demand.
Most analysts expect the Fed to lower its key interest rate by a quarter point at its policy-setting meeting next Tuesday and Wednesday.
New York's main oil futures contract, light sweet crude for delivery in June, slid 46 cents to $115.60 per barrel.
The benchmark contract closed down $2.24 at $116.06 a barrel during floor trading yesterday at the New York Mercantile Exchange.
The May contract had struck a record high of $119.90 before expiring on Tuesday.
London's Brent North Sea crude for June delivery yesterday settled $2.12 lower at $114.34 a barrel after earlier hitting a record intraday peak of $116.87.
In the foreign exchange market yesterday, the dollar gained in value against the euro amid speculation the US Federal Reserve soon might end its campaign of cutting interest rates.
The single European currency traded below $1.57 today, three days after it had crossed $1.60 for the first time.
"It seems that a larger-than-expected increase in US crude inventories during last week and a stronger dollar were good excuses for some investors to book profits," Sucden analyst Andrey Kryuchenkov said.
A stronger US currency makes dollar-priced crude more expensive for foreign buyers, tending to discourage demand.
Most analysts expect the Fed to lower its key interest rate by a quarter point at its policy-setting meeting next Tuesday and Wednesday.
Saturday, April 19, 2008
Oil Hits New Record $117 A Barrel
NEW YORK: Oil prices hit a record high $117 a barrel on Friday as jitters over Nigerian oil supplies outweighed a rally in the dollar and fears of an economic slowdown in giant energy consumer China.
US light crude settled up $1.83 at $116.96 a barrel, before hitting a record $117. London Brent crude gained $1.49 to $113.92.
Oil prices have more than quadrupled since 2002 as supply struggles to keep up with booming demand, especially in China and other emerging economies.
"The bulls still hold the cards," said Mike Fitzpatrick of MF Global in New York.
A Nigerian rebel group said Friday it had sabotaged a major oil pipeline operated by Royal Dutch Shell and vowed to step up attacks on oil installations.
Shell officials, which is currently pumping 400,000 barrels per day below capacity in the OPEC nation due to sabotage and security concerns, confirmed a small amount of production had been shut in.
Strikers at the major southern French oil port of Fos-Lavera vowed to remain on picket lines through Saturday. The strike trapped 23 vessels, including four crude oil tankers and six refined products tankers in the port.
A similar strike March lasted 17 days and forced four oil refineries with 603,000 barrels per day of combined capacity to curtail operations, helping spur a late spring rally in European diesel prices.
A British union will launch a two-day strike from April 27 at Ineos Grangemouth refinery, forcing it to shut down with an impact on the North Sea Forties pipeline system, which terminates there, both sides said on Friday.
Strong demand for diesel fuel in emerging markets has been offsetting weakness in U.S. oil demand, analysts at Goldman Sachs said in a research note released Friday.
Goldman expects US crude oil futures to average $105 a barrel this year and end the year at $115 a barrel, driven by tight distillate supplies and continued increases in the cost of building new oil production capacity.
Oil had fallen as low as $112.72 overnight after the dollar rallied against other major currencies as Citigroup, the biggest U.S. bank, delivered better than expected quarterly results.
A sharp fall in China's stock market on Friday spurred concerns over a possible economic slowdown in China, the world's second largest consumer of oil.
China's stock market fell nearly 4 per cent to a 12-month closing low as the biggest stock, PetroChina slid below its October initial public offering price in Shanghai.
US light crude settled up $1.83 at $116.96 a barrel, before hitting a record $117. London Brent crude gained $1.49 to $113.92.
Oil prices have more than quadrupled since 2002 as supply struggles to keep up with booming demand, especially in China and other emerging economies.
"The bulls still hold the cards," said Mike Fitzpatrick of MF Global in New York.
A Nigerian rebel group said Friday it had sabotaged a major oil pipeline operated by Royal Dutch Shell and vowed to step up attacks on oil installations.
Shell officials, which is currently pumping 400,000 barrels per day below capacity in the OPEC nation due to sabotage and security concerns, confirmed a small amount of production had been shut in.
Strikers at the major southern French oil port of Fos-Lavera vowed to remain on picket lines through Saturday. The strike trapped 23 vessels, including four crude oil tankers and six refined products tankers in the port.
A similar strike March lasted 17 days and forced four oil refineries with 603,000 barrels per day of combined capacity to curtail operations, helping spur a late spring rally in European diesel prices.
A British union will launch a two-day strike from April 27 at Ineos Grangemouth refinery, forcing it to shut down with an impact on the North Sea Forties pipeline system, which terminates there, both sides said on Friday.
Strong demand for diesel fuel in emerging markets has been offsetting weakness in U.S. oil demand, analysts at Goldman Sachs said in a research note released Friday.
Goldman expects US crude oil futures to average $105 a barrel this year and end the year at $115 a barrel, driven by tight distillate supplies and continued increases in the cost of building new oil production capacity.
Oil had fallen as low as $112.72 overnight after the dollar rallied against other major currencies as Citigroup, the biggest U.S. bank, delivered better than expected quarterly results.
A sharp fall in China's stock market on Friday spurred concerns over a possible economic slowdown in China, the world's second largest consumer of oil.
China's stock market fell nearly 4 per cent to a 12-month closing low as the biggest stock, PetroChina slid below its October initial public offering price in Shanghai.
Thursday, April 17, 2008
Oil Prices Steady Near Record Highs
SINGAPORE: Oil prices held steady near record highs in Asian trading on Thursday, boosted by a decline in US energy reserves and a weakening dollar that attracted investors to commodities, analysts said.
New York's main oil futures contract, light sweet crude for delivery in May, was 10 cents lower at $114.83 per barrel after a record close of $114.93 at the New York Mercantile Exchange on Wednesday.
In electronic trading after Wednesday's session, the price crossed 115 dollars for the first time and reached a high of 115.21.
Brent North Sea crude for June was six cents higher at 112.72, from a record close of 112.66 on Wednesday in London.
London Brent had surged even higher in after-hours trading, where it struck a record peak of $112.83.
Both futures contracts also hit record highs on Tuesday in a market worried about tight supplies.
Those concerns were accentuated on Wednesday by the weekly report from the US Department of Energy that showed US energy stockpiles tumbled in the week ending April 11.
Oil futures also gained support after the dollar plunged to an all-time low against the euro, traders said.
The US dollar on Thursday morning traded at 1.5936 to the euro after falling to a record 1.5979 on Wednesday as two US government economic reports raised the odds of further interest rate cuts ahead.
New York's main oil futures contract, light sweet crude for delivery in May, was 10 cents lower at $114.83 per barrel after a record close of $114.93 at the New York Mercantile Exchange on Wednesday.
In electronic trading after Wednesday's session, the price crossed 115 dollars for the first time and reached a high of 115.21.
Brent North Sea crude for June was six cents higher at 112.72, from a record close of 112.66 on Wednesday in London.
London Brent had surged even higher in after-hours trading, where it struck a record peak of $112.83.
Both futures contracts also hit record highs on Tuesday in a market worried about tight supplies.
Those concerns were accentuated on Wednesday by the weekly report from the US Department of Energy that showed US energy stockpiles tumbled in the week ending April 11.
Oil futures also gained support after the dollar plunged to an all-time low against the euro, traders said.
The US dollar on Thursday morning traded at 1.5936 to the euro after falling to a record 1.5979 on Wednesday as two US government economic reports raised the odds of further interest rate cuts ahead.
Wednesday, April 16, 2008
Oil Prices Ease After Record Highs
SINGAPORE: Oil prices eased in Asian trade on Wednesday after a series of record highs driven by supply worries, dealers said.
In morning trade, New York's main oil contract, light sweet crude for delivery in May, was 30 cents lower at $113.49.
The contract earlier topped 114 dollars a barrel for the first time, hitting 114.08, after floor trading closed on Tuesday at the New York Mercantile Exchange.
Brent North Sea Crude for June delivery was 38 cents lower at $111.20 a barrel.
Brent for May expired on Tuesday at a record $111.31 a barrel after reaching an intraday high of $112.08.
Analysts said gains were underpinned by expectations that an inventory report from the US Department of Energy (DoE), due later Wednesday, would show further declines in US gasoline and heating oil inventories.
Recent production stoppages have added to supply worries, analysts said.
In morning trade, New York's main oil contract, light sweet crude for delivery in May, was 30 cents lower at $113.49.
The contract earlier topped 114 dollars a barrel for the first time, hitting 114.08, after floor trading closed on Tuesday at the New York Mercantile Exchange.
Brent North Sea Crude for June delivery was 38 cents lower at $111.20 a barrel.
Brent for May expired on Tuesday at a record $111.31 a barrel after reaching an intraday high of $112.08.
Analysts said gains were underpinned by expectations that an inventory report from the US Department of Energy (DoE), due later Wednesday, would show further declines in US gasoline and heating oil inventories.
Recent production stoppages have added to supply worries, analysts said.
Friday, April 11, 2008
Oil Prices Ease In Asian Trade
SINGAPORE: World oil prices eased on Friday but remained near record highs in Asian trade despite worries over slowing demand, analysts said.
In morning trade, New York's main oil contract, light sweet crude for delivery in May, dipped 49 cents to $109.62 per barrel.
During floor trading on Thursday at the New York Mercantile Exchange, the contract drifted 78 cents lower to close at $110.11.
Brent North Sea crude for May dipped 29 cents to $107.91 a barrel, pulling back further from a fresh intraday peak of $109.98 reached Thursday in London.
The New York contract struck an historic $112.21 in intraday trade on Wednesday.
Victor Shum, senior principal at Purvin and Gertz energy consultancy in Singapore, said prices retreated because the market was over-bought after a United States report showed falling energy stockpiles.
He said a slight rebound in the US dollar contributed to the pullback. "The declining oil demand has also resulted in some caution in the market," he said.
In morning trade, New York's main oil contract, light sweet crude for delivery in May, dipped 49 cents to $109.62 per barrel.
During floor trading on Thursday at the New York Mercantile Exchange, the contract drifted 78 cents lower to close at $110.11.
Brent North Sea crude for May dipped 29 cents to $107.91 a barrel, pulling back further from a fresh intraday peak of $109.98 reached Thursday in London.
The New York contract struck an historic $112.21 in intraday trade on Wednesday.
Victor Shum, senior principal at Purvin and Gertz energy consultancy in Singapore, said prices retreated because the market was over-bought after a United States report showed falling energy stockpiles.
He said a slight rebound in the US dollar contributed to the pullback. "The declining oil demand has also resulted in some caution in the market," he said.
Thursday, April 10, 2008
Oil Prices Steady Near $111 After Overnight Surge To Record
SINGAPORE: Oil prices steadied near $111 a barrel on Thursday after jumping to a new record in the previous session on an unexpected drop in US crude inventories.
The US Energy Information Administration's inventory report, closely watched by the market, showed Wednesday that crude stocks fell 3.2 million barrels last week.
``The crude inventory draw was a big surprise to the market, which had actually expected an increase of 2 to 3 million barrels. It was a substantial drawdown,'' said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Analysts surveyed by Dow Jones Newswires had expected, on average, an increase of 2.4 million barrels.
The decline in crude stockpiles pushed light, sweet crude for May delivery up $2.37 to settle at a record $110.87 a barrel on the New York Mercantile Exchange on Wednesday. It rose as high as $112.21 a barrel during the floor session, surpassing the previous trading record of $111.80, set last month.
On Thursday, the contract rose 2 cents to $110.89 a barrel in Asian electronic trading by midmorning in Singapore.
Some analysts cautioned against reading too much into last week's drop in crude supplies, noting a sharp drop in imports over the same period.
``Imports have been somewhat erratic, I would say this one week's result is not a trend,'' Shum said. ``It might be compensated by a large import next week.''
The EIA also said gasoline and distillate supplies _ which include diesel fuel and heating oil _ fell more than expected last week, although analysts said gasoline inventory levels remained healthy.
``Gasoline inventories are higher than the historical average at this time of the year, and gasoline fundamentals are actually weakening in the US, so there is really no need to worry about supply being too tight,'' Shum said.
Analysts expect demand for gasoline and oil to fall further as prices rise. Theoretically, that should bring prices down. But so far this year, prices have shown little inclination to fall in response to eroding demand. With gasoline supplies shrinking and the Northern Hemisphere summer approaching _ when demand, while weaker than last year, will be stronger than it is now _ consumers may have to wait until later in the year for price relief.
Also supporting oil prices was the release of a gloomy report by the International Monetary Fund Wednesday that said the US is headed for a recession, dragging world economic growth down along with it.
The IMF slashed growth projections for the United States _ the epicenter of the woes _ and for the world economy. Its sobering new forecast underscored the damage inflicted from the US housing and credit debacles.
``Normally with bearish economic data you would see oil pricing drop, but these days the trading relationship is: bad economic news means bullish movements in oil,'' Shum said.
Financial market interprets grim news as indications that the US Federal Reserve will further cut interest rates, which would drive the US dollar down, he said. A weaker dollar attracts financial investors to oil and other commodities as a hedge against inflation.
In other Nymex trading, heating oil futures rose 0.55 cent to $3.24 a gallon (3.8 liters) while gasoline prices added 0.58 cent to $2.78 a gallon. Natural gas futures rose 9.4 cents to $10.15 per 1,000 cubic feet.
Brent crude rose a cent to $108.48 a barrel on the ICE Futures Exchange in London.
The US Energy Information Administration's inventory report, closely watched by the market, showed Wednesday that crude stocks fell 3.2 million barrels last week.
``The crude inventory draw was a big surprise to the market, which had actually expected an increase of 2 to 3 million barrels. It was a substantial drawdown,'' said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Analysts surveyed by Dow Jones Newswires had expected, on average, an increase of 2.4 million barrels.
The decline in crude stockpiles pushed light, sweet crude for May delivery up $2.37 to settle at a record $110.87 a barrel on the New York Mercantile Exchange on Wednesday. It rose as high as $112.21 a barrel during the floor session, surpassing the previous trading record of $111.80, set last month.
On Thursday, the contract rose 2 cents to $110.89 a barrel in Asian electronic trading by midmorning in Singapore.
Some analysts cautioned against reading too much into last week's drop in crude supplies, noting a sharp drop in imports over the same period.
``Imports have been somewhat erratic, I would say this one week's result is not a trend,'' Shum said. ``It might be compensated by a large import next week.''
The EIA also said gasoline and distillate supplies _ which include diesel fuel and heating oil _ fell more than expected last week, although analysts said gasoline inventory levels remained healthy.
``Gasoline inventories are higher than the historical average at this time of the year, and gasoline fundamentals are actually weakening in the US, so there is really no need to worry about supply being too tight,'' Shum said.
Analysts expect demand for gasoline and oil to fall further as prices rise. Theoretically, that should bring prices down. But so far this year, prices have shown little inclination to fall in response to eroding demand. With gasoline supplies shrinking and the Northern Hemisphere summer approaching _ when demand, while weaker than last year, will be stronger than it is now _ consumers may have to wait until later in the year for price relief.
Also supporting oil prices was the release of a gloomy report by the International Monetary Fund Wednesday that said the US is headed for a recession, dragging world economic growth down along with it.
The IMF slashed growth projections for the United States _ the epicenter of the woes _ and for the world economy. Its sobering new forecast underscored the damage inflicted from the US housing and credit debacles.
``Normally with bearish economic data you would see oil pricing drop, but these days the trading relationship is: bad economic news means bullish movements in oil,'' Shum said.
Financial market interprets grim news as indications that the US Federal Reserve will further cut interest rates, which would drive the US dollar down, he said. A weaker dollar attracts financial investors to oil and other commodities as a hedge against inflation.
In other Nymex trading, heating oil futures rose 0.55 cent to $3.24 a gallon (3.8 liters) while gasoline prices added 0.58 cent to $2.78 a gallon. Natural gas futures rose 9.4 cents to $10.15 per 1,000 cubic feet.
Brent crude rose a cent to $108.48 a barrel on the ICE Futures Exchange in London.
Friday, April 4, 2008
Oil Prices Turn Higher In Asian Trade
SINGAPORE: World oil prices turned higher in Asia on Friday after recent choppy trade with markets weighing the likely slowing of economic growth against concerns about tight supplies, dealers said.
In morning trade, New York's main oil contract, light sweet crude for delivery in May, rose 42 cents to 104.25 dollars per barrel.
The benchmark contract fell one dollar to $103.83 per barrel at the close of floor trading on Thursday at the New York Mercantile Exchange.
Brent North Sea crude for May advanced 41 cents to $102.93 a barrel, after settling at $102.52 on Thursday in London.
The markets digested comments on Wednesday from US Federal Reserve chairman Ben Bernanke that the US economy could slide into a possible recession during the first half of 2008.
They also mulled news from the International Monetary Fund that it would cut its global growth forecast by a substantial half a percentage point to 3.7 per cent.
"Economy, economy, economy. That's the number one concern, followed by supply worries," said Tony Nunan of Mitsubishi Corp's international petroleum business in Tokyo.
"Any news that is hugely bearish will cause prices to go down" but the market had expected Bernanke's comments, Nunan said.
Crude futures rocketed on Wednesday after the US government's Energy Information Administration said American gasoline reserves tumbled by 4.5 million barrels last week. Market expectations had been for a lighter drop of 2.5 million barrels.
At the same time, the EIA said US crude inventories had surged by 7.4 million barrels in the week ending March 28. The gain smashed analysts' consensus forecast for a gain of 2.25 million barrels.
The market is beginning to closely watch gasoline inventories ahead of the United States' peak demand season for motor fuel, which begins in May when Americans begin their summer vacations.
US unemployment figures due for release on Friday will be closely watched as traders mull the health of the American economy.
"The main statistic for the week will be the employment number and would-be sellers on oil will stay on the sideline until then," said Petromatrix analyst Olivier Jakob.
In morning trade, New York's main oil contract, light sweet crude for delivery in May, rose 42 cents to 104.25 dollars per barrel.
The benchmark contract fell one dollar to $103.83 per barrel at the close of floor trading on Thursday at the New York Mercantile Exchange.
Brent North Sea crude for May advanced 41 cents to $102.93 a barrel, after settling at $102.52 on Thursday in London.
The markets digested comments on Wednesday from US Federal Reserve chairman Ben Bernanke that the US economy could slide into a possible recession during the first half of 2008.
They also mulled news from the International Monetary Fund that it would cut its global growth forecast by a substantial half a percentage point to 3.7 per cent.
"Economy, economy, economy. That's the number one concern, followed by supply worries," said Tony Nunan of Mitsubishi Corp's international petroleum business in Tokyo.
"Any news that is hugely bearish will cause prices to go down" but the market had expected Bernanke's comments, Nunan said.
Crude futures rocketed on Wednesday after the US government's Energy Information Administration said American gasoline reserves tumbled by 4.5 million barrels last week. Market expectations had been for a lighter drop of 2.5 million barrels.
At the same time, the EIA said US crude inventories had surged by 7.4 million barrels in the week ending March 28. The gain smashed analysts' consensus forecast for a gain of 2.25 million barrels.
The market is beginning to closely watch gasoline inventories ahead of the United States' peak demand season for motor fuel, which begins in May when Americans begin their summer vacations.
US unemployment figures due for release on Friday will be closely watched as traders mull the health of the American economy.
"The main statistic for the week will be the employment number and would-be sellers on oil will stay on the sideline until then," said Petromatrix analyst Olivier Jakob.
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