Crude Oil Declines on Stronger Dollar, Forecast of Gain in U.S. Inventory

Crude oil declined for the first time in three days as the dollar gained against the euro, reducing the appeal of commodities as an alternative investment. Oil slipped as much as 2.1 percent after the euro weakened amid concern that the Greek financial crisis will trigger a default on debts by other European countries. Prices also dropped on forecasts that a government report tomorrow will show U.S. oil supplies increased last week.

“There’s a healthy amount of skepticism about both the global economic situation and sovereign debt problems in Europe,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. “This is leading to the revival of the dollar as a safe haven, which is hitting oil.”

Crude oil for April delivery fell 90 cents, or 1.1 percent, to $80.97 a barrel at 11:05 a.m. on the New York Mercantile Exchange. Yesterday, the contract rose 37 cents to $81.87, the highest settlement since Jan. 11.

Oil, equities and the dollar have rebounded from a year ago, when the Standard & Poor’s 500 Index fell to its lowest level since the collapse of Lehman Brothers Holdings Inc. Oil is up 72 percent, and the S&P Index has risen 68 percent since March 9 last year.

The greenback traded at $1.3573 per euro, up 0.4 percent from $1.3634 yesterday. It was the first increase in three days. “Economic concerns are hitting the oil market,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “Worries about sovereign debt in Europe are seeping into the market and giving the dollar a boost”.....Read the entire article.



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Crude Oil Fluctuates Near $80 a Barrel on Total Strike and Dollar's Increase

Oil fluctuated near $80 a barrel as strikes at Total SA refineries and depots in France supported prices of refined products such as gasoline and the dollar strengthened against the euro. Oil rose to a five week high after gasoline futures gained as much as 2 percent amid union calls on Total workers to extend walkouts. The dollar’s advance makes oil and other commodities less attractive as an alternative investment.

“Once you get up to the $80 level, it’s just having trouble maintaining that,” said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. Demand from industrialized countries “just doesn’t support it. I think we’re stuck in a very broad range of $70 to $80 until something decisive happens.”

Crude oil for March delivery increased 27 cents to $80.08 a barrel at 1:46 p.m. on the New York Mercantile Exchange. Earlier it touched $80.51, the highest price since Jan. 13. The March contract expires at the close of trading today. The more-active April contract gained 27 cents to $80.33.

Workers at Total’s six French oil-processing plants and six of its 31 storage depots have been on strike since Feb. 16 to protest against the permanent shutdown of refining at its Flanders plant in northern France. The strike comes as weak demand has curtailed refinery production worldwide.

“When you have that coupled with the situation in the U.S. with the low run rates, it’s constructive for the overall market,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities.....Read the entire article.

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Oil Rises to Five Week High on Fed Rate Gain, French Strike

Crude oil climbed to a five week high after the Federal Reserve’s discount rate increase signaled an extended economic recovery and as a strike at Total SA refineries in France cut fuel output. Oil gained 0.9 percent after the central bank said the decision is a “normalization” of lending. The Fed raised the rate for direct loans to banks by a quarter point to 0.75 percent yesterday. Striking French workers began shutting oil processing operations today and warned of fuel shortages.

“The Fed’s increase of the discount rate shows that they expect further improvement of the U.S. economy,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas based energy consultant. “It’s a signal that more growth is in the cards and the fundamentals will improve.” Crude oil for March delivery increased 75 cents to $79.81 a barrel on the New York Mercantile Exchange, the highest settlement price since Jan. 12. Prices rose 7.7 percent this week, the biggest gain since October.

The increase in the discount rate is the first since June 2006. U.S. central bankers closed four emergency lending facilities this month and are preparing to reverse or neutralize the more than $1 trillion in excess bank reserves they have pumped into the banking system. “The Fed’s action is recognition that the economy is picking up,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. “This signals that we may see the end of the lousy fuel demand numbers”.....Read the entire article.


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Oil Crunch Cometh....In 2015?

Discussing the probability of an oil shortage in 2015, with John Kilduff, Round Earth Capital, and Dr. Robert Hirsch, Management




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Oil Surges to One Year High on U.S. Gasoline Supply Decline

Crude oil rose above $81 a barrel in New York for the first time in a year and gasoline surged after a U.S. Energy Department report showed a greater than forecast drop in supplies of the motor fuel. Gasoline stockpiles fell 2.21 million barrels, more than twice the median of analyst forecasts, to 206.9 million barrels in the week ended Oct. 16, according to the department’s report. Oil also advanced as U.S. equities increased and the dollar slipped against the euro, bolstering the appeal of commodities.

“The gasoline number has clearly changed the landscape,” said John Kilduff, senior vice president of energy at MF Global in New York. “The industry is seen constraining fuel supply, which is underpinning the market.” Crude oil for December delivery climbed $2.52, or 3.2 percent, to $81.64 a barrel at 12:59 p.m. on the New York Mercantile Exchange. Futures touched $81.73, the highest since Oct. 14, 2008. Prices are up 82 percent this year.

Oil traded at $78.76 a barrel before the release of the report at 10:30 a.m. in Washington. Gasoline for November delivery climbed 5.78 cents, or 2.9 percent, to $2.0455 a gallon in New York. Futures touched $2.0534, the highest since Aug. 31. Prices are up for an eighth day.....Read the entire article.

Crude Oil Declines for a Second Day on Stronger U.S. Dollar

Crude oil fell for a second day as the dollar strengthened against the euro, dimming investors’ demand for dollar priced assets to hedge against inflation. Oil dropped as much as 1.7 percent as the U.S. currency climbed for the first time in five days. Inventories of crude oil, gasoline and distillate fuel are higher than average, according to the Energy Department.

“The rally in energy is looking a little long in the tooth,” said John Kilduff, senior vice president of energy at MF Global in New York. “There isn’t any economic data to give the market any strength. The dollar is a bit stronger today, which is weighing on things”.....Read the entire story

Oil Rises Above $71 as Dollar Tumbles, OPEC Ministers Gather

Crude oil rose above $71 a barrel after the dollar declined, spurring demand for commodities, and as OPEC ministers gathered in Vienna to decide on output levels. Oil increased the most in more than two weeks and gold climbed above $1,000 an ounce as the U.S. currency dropped to the lowest level this year against the euro and on speculation inflation will accelerate. The oil market is in “good shape,” Saudi Arabian Oil Minister Ali al-Naimi said, signaling the group is unlikely to change output quotas. “Today’s move in oil is all about the dollar and inflation concerns,” said John Kilduff, senior vice president of energy at MF Global in New York. “These concerns are also reflected in the gold market, which broke through resistance at the important $1,000 level”.....Read the entire article

Crude Oil Rises the Most in More Than a Month as Dollar Tumbles

Crude oil rose the most in more than a month after the dollar declined, spurring demand for commodities, and as OPEC ministers gathered in Vienna to decide on production levels. Oil topped $71 a barrel and gold climbed above $1,000 an ounce as the U.S. currency dropped to the lowest level this year against the euro and on speculation inflation will accelerate. The oil market is in “good shape,” Saudi Arabian Oil Minister Ali al-Naimi said, signaling the group is unlikely to change output quotas.“Today’s move in oil is all about the dollar and inflation concerns,” said John Kilduff, senior vice president of energy at MF Global in New York.....Read the entire article