Tuesday, October 12, 2010
Crude Oil Falls Ahead Of Fed Minutes
But after a rally above $84 a barrel last week, oil traders are wary about how the central bank will decide to act, and how it will influence oil and the financial markets that crude has closely followed in recent months. "We've put this quantitative easing premium in the marketplace, and now people are a little worried about the size of it," said Phil Flynn, an analyst with PFG Best, which tracks the market. He said traders are selling to lock in profits.
The Organization of Petroleum Exporting Countries on Tuesday revised up its forecast for global oil demand growth this year, encouraged by stimulus-led economic growth in the first half of 2010. OPEC upgraded its forecast for world oil demand growth by 100,000 barrels a day to 1.13 million barrels a day, and its non OPEC supply forecast for 2010 was also increased by 100,000 barrels a day to 1.01 million barrels a day. OPEC is expected to keep quotas unchanged when the group meets Thursday, though some member countries have said prices should move higher due to the weakening dollar.
Despite U.S. inventories of oil and fuel products that hit 27 year highs last month, economic data and moves in the dollar have trumped worries about oil supply and demand. U.S. crude oil stocks are expected to rise in a report due Thursday from the Department of Energy, according to a Dow Jones Newswires survey of analysts. Crude stocks are seen increasing by 1.2 million barrels, according to data covering the week ended Oct. 8.
Meanwhile, France was hit by a nationwide strike against pension reform, and the industrial dispute that has closed the Fos-Lavera oil terminal, the world's third largest oil port, entered its 16th day. The Marseille port authority said 85 ships have been affected, of which 56 are oil tankers. Front month November reformulated gasoline blendstock, or RBOB, recently traded 3.41 cents, or 1.6%, lower at $2.1314 a gallon. November heating oil recently traded 1.97 cents lower at $2.2593 a gallon.
Courtesy of Wall Street Journal/Dow Jones Newswire
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