Commodity Corner: Crude Oil Up 3%

Crude oil rebounded Wednesday on positive manufacturing data from China, encouraging U.S. employment data, and word that the United States may join a European bailout program. Oil for January delivery rose $2.64 to settle at $86.75 a barrel. One factor providing momentum for oil was a monthly update of the China Purchasing Managers Index (PMI).

According to the China Federation of Logistics and Purchasing, the PMI increased by 0.9 percent in November. Also benefiting oil was an ADP Employer Services report indicating that private sector employers in the U.S. added 93,000 jobs last month. The finding was above expectations.

In addition, the prospect of U.S. backing for faltering banks in European Union countries proved bullish for oil. Citing an unnamed U.S. official, Reuters reported Wednesday that the U.S. might augment a $980 billion dollar fund to bail out heavily indebted EU region banks using money from the International Monetary Fund (IMF). Other news reports, however, quoted a Treasury Department official who denied that talks were underway to contribute funds to the so called European Financial Stability Facility. January crude traded from $83.63 to $86.62.

Bullish sentiment also was evident in the natural gas futures price. January natural gas increased nine cents to settle at $4.27 per thousand cubic feet. Projections of below normal temperatures through next week in the Northeast and Midwest provided an impetus for Wednesday's increase. The natural gas futures price fluctuated from $4.16 to $4.32.

Gasoline for January delivery also ended the day higher, gaining 13 cents to settle at $2.30 a gallon. It peaked at $2.31 and bottomed out at $2.18. The December gasoline contract, which expired Tuesday, finished at $2.27.

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Commodity Corner: Crude Oil Tumbles on Lingering Debt Concerns

Light, sweet crude futures fell Tuesday as concern over the European debt crisis resurfaced after the euro plummeted to its lowest level in 10 weeks. Led by declines in heating oil and gasoline futures [which expired at close] and crude oil tumbled more than a dollar a barrel in the last half hour of Tuesday's trading session. Oil prices for January delivery settled at $84.11 a barrel, 1.9 percent lower than Monday.

Fear lingers as investors worry that other countries, such as Spain, Portugal, or Italy, might also need financial assistance after Ireland’s massive bailout package earlier this week. The euro lost 0.9 percent Tuesday, hitting a two month low against the dollar. The greenback rose 0.5 percent on the U.S. dollar index, which gauges the dollar to an array of six other currencies. As the dollar strengthens, crude becomes more expensive for foreign buyers and dollar denominated commodities lose their appeal.

The intraday range for crude futures was $83.55 to $85.90 Tuesday. Front month December gasoline settled nearly two cents lower at $2.26 a gallon on the New York Mercantile Exchange. The December contract for gasoline expired at Tuesday's settlement. In spite of the global economic crisis, gasoline gained 6.3 percent this month the largest since September. Gasoline fluctuated between $2.23 and $2.28 Tuesday.

Natural gas futures also tumbled Tuesday, as stockpiles exceeded expectations of an increase in heating demand due to the forecasted colder than normal temperatures. Although natural gas prices typically correlate with heating demand in the winter, analysts predict that the surplus in supplies has limited rallies; however, they remain uncertain about long term predictions. January Natural gas traded lower for the second consecutive session at $4.18 per thousand cubic feet. It peaked at $4.25 and bottomed out at $4.13 Tuesday.

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Commodity Corner: Crude Oil Begins Week Much Higher

A weaker equities market and a stronger dollar failed to place downward pressure on crude oil Monday. Crude oil for January delivery gained $1.97 to settle at $85.75 a barrel during a trading day influenced by factors ranging from oil products demand to the release of politically sensitive information attributed to U.S. State Department officials. In the latter case, ongoing fallout from the widespread leaks has heightened perceived geopolitical risks.

Exacerbating the geopolitical situation have been escalating tensions between North and South Korea as well as continued speculation about Europe's debt crises. Although the European Union approved a EUR85 billion bailout for Ireland over the weekend, there are fears that other heavily indebted countries such as Spain and Portugal will be next in line for massive financial aid packages. In addition, tightening inventories of gasoline contributed to oil's rally Monday. December gasoline ended the day seven cents higher at $2.28 a gallon

Oil traded within a range from $83.59 to $85.54. Gasoline, meanwhile, peaked at $2.29 and bottomed out at $2.21. Despite a chillier than normal forecast for the Northeast, January natural gas fell 19 cents to settle at $4.21 per thousand cubic feet. The natural gas futures price fluctuated from $4.17 to $4.49.

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Commodity Corner: Crude Oil Falls on Europe, Korea Concerns

Crude dropped for the third day Tuesday amid a backdrop of lingering concerns about the European debt crises and the two Koreas' shelling exchange.

Light, sweet crude futures fell 49 cents, settling at $81.25 a barrel on the New York Mercantile Exchange. Oil tumbled 0.6 percent Tuesday, a day after Ireland sought a financial bailout from the European Union and International Monetary Fund. German Chancellor Angela Merkel's comments that the euro is in an "exceptionally serious" situation added to the European debt fears, sending the dollar up against the euro. A stronger dollar curbs commodities' appeal for buyers with foreign currencies.

Escalating tensions between North and South Korea also contributed to decreasing prices. North and South Korea's exchange of artillery fire early Tuesday drove investors to seek refuge from riskier assets, according to analysts. The intraday range for crude prices was $80.28 to $82.10 Tuesday.

Natural gas for December delivery fell by less than a penny Tuesday to settle at $4.26 per thousand cubic feet. The decline came as forecasts showed milder weather in the U.S. The National Weather Service now expects normal to above normal temperatures in the Northeast for the next six to 10 days. The December contract for natural gas expires Wednesday, along with the release of this week's inventory report. It will be released a day earlier due to the U.S. Thanksgiving holiday on Thursday. Henry Hub natural gas peaked at $4.29 and bottomed out at $4.115.

Front month December gasoline also settled lower, falling 1.77 cents to end Tuesday's trading session at $2.13 a gallon. RBOB gasoline fluctuated between $2.10 and $2.15 Tuesday.


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Commodity Corner: Crude Oil Settles Lower on Weaker Euro

Crude oil on the January contract ended the day at $81.74, a .24 cent decline from Friday, as the euro slipped 0.4 percent against the greenback. Although Ireland has agreed to a bailout plan from the European Union to shore up its banks amid a serious debt crisis, lingering concerns that Portugal and Spain are the next EU countries in line for bailouts were bearish for the euro. Because oil is priced in dollars, a stronger dollar makes it less attractive to buyers holding other currencies.

January crude traded within a range from $80.68 to $82.87 Monday. Oil settled at $81.51 Friday on the December contract, which has expired.

The National Weather Service expects the Midwest and Northeast to experience colder than normal temperatures through next week. Given the regions' anticipated greater electricity demand during this period, December natural gas settled 11 cents higher at $4.27 per thousand cubic feet. It traded from $4.125 to $4.28.

Although the American Automobile Association expects more motorists to be on the road for this year's Thanksgiving holiday, December gasoline ended the day a nickel lower at $2.15 per gallon. The front month gasoline price fluctuated Monday from $2.13 to $2.215.

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Commodity Corner: Crude Oil Down, Natural Gas Up for the Week

Crude oil settled at $81.51 a barrel Friday, a 34 cent decline from the previous day, as traders responded to action taken by the Chinese government to address rising inflation.

China's government, which many thought would raise interest rates to quell inflation, decided to take a somewhat milder approach Friday: increasing the required reserve replacement ratio for banks. Although less dramatic than the former approach, the move is expected to have a dampening effect on demand for oil and other commodities.

Also on the minds of traders was pending action by the Irish government, which faces a serious debt crisis brought on by a real estate bust. Ireland's prime minister on Friday confirmed the government was holding talks with the EU and the International Monetary Fund to craft a bank bailout plan to help stabilize the country's banks. The increasing likelihood of an Irish bank bailout has helped the euro to regain strength against the dollar recently. However, a weaker dollar was not enough to carry oil into positive territory for Friday.

December crude traded within a range from $80.59 to $82.75 Friday. Beginning with Monday's settlement price of $84.86, oil is down 3.9 percent for the week.

For natural gas, the story has been quite different. December gas futures surged 8.2 percent during the week, thanks to colder weather conditions taking hold in much of the country and forecast to continue through the Thanksgiving holiday.

Natural gas gained 15 cents Friday to settle at $4.16 per thousand cubic feet. It peaked at $4.17 and bottomed out at $3.975.

Gasoline for December delivery fell three cents to settle at $2.20 a gallon Friday. The futures price fluctuated from $2.16 to $2.25. Gasoline is virtually flat for the week, having risen only 0.2 percent since Monday.

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Commodity Corner: Crude Oil Up 1.75% on Irish Expectations

Mounting expectations that Ireland will accept a bank bailout from the European Union caused the greenback to weaken, causing December crude oil futures to end the day higher Thursday.

Oil rose $1.41 to settle at $81.85 a barrel. After some reluctance this week, Irish government officials on Thursday confirmed that they were pursuing a loan from the EU to bolster the country's banking system. The Irish government's shifting position in turn provided some comfort to other EU economies grappling with their own debt crises. Moreover, it helped the euro to reverse recent losses and gain 0.8 percent against the dollar.

Front-month crude traded within a range from $80.44 to $82.35 Thursday.

Buoyed by the prospect of a busier Thanksgiving travel period this year, along with low East Coast inventories, gasoline surged more than three percent to settle at $2.23 a gallon. December gasoline traded from $2.16 to $2.24.

Natural gas for December delivery fell two cents to end the day at $4.01 per thousand cubic feet. The futures price fluctuated from $3.85 to $4.04.


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Commodity Corner: Crude Oil Declines Despite Lower Inventories

Concerns about global oil demand on Wednesday trumped a U.S. Department of Energy report that stockpiles of oil and gasoline were down last week.

Crude oil for December delivery fell $1.90 to settle at $80.44 Wednesday as traders anticipated China's pending actions to rein in inflation. China is expected to raise interest rates to in an effort to stabilize rising prices, and the country's government on Wednesday emphasized its focus on boosting the availability of oil and other commodities.

The DOE's Energy Information Administration reported Wednesday that U.S. commercial crude oil stocks fell by 2 percent as of November 12, 2010, to 357.6 million barrels. Last week's 7.3 million-barrel decline marked the second straight week of lower oil inventories as reported by the EIA.

December crude oil traded from $80.06 to $82.67 Wednesday.

The EIA also reported that gasoline stocks fell 1.2 percent last week. However, front-month gasoline settled flat at $2.16 a gallon Wednesday. According to the DOE agency, total U.S. gasoline inventories stood at 207.7 million barrels as of November 12.

The gasoline futures price ranged from $2.16 to $2.18 during Wednesday's trading.

Thanks to cooler weather, coupled with speculation that the DOE will report a drop in inventories Thursday, December natural gas settled at $4.03 per thousand cubic feet a .21 cent day on day increase. Natural gas traded from 3.80 to 4.04 Wednesday.


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Commodity Corner: Crude Oil Falls 3%

A stronger dollar, coupled with fears of slower economic growth in Asia, contributed to a three percent drop in December oil futures Tuesday.

Crude oil settled at $82.34 a barrel, compared to $84.86 on Monday, as the euro weakened amid reports that the European Union seeks to counter Ireland's debt problems with a bailout. Bailing out Ireland, which is struggling with the burden of having nationalized three banks to cope with its real estate bust, could create new problems for large banks and have a chilling effect on lending elsewhere in the EU.

In Asia, efforts to curb the rate of inflation stoked concerns that oil demand will soften. South Korea's central bank has boosted interest rates to combat inflation, and China is expected to implement its own monetary policy tightening measures.

Crude oil peaked at $84.74 and bottomed out at $82.26.

Natural gas for December delivery also slumped Tuesday, settling roughly 2.5 cents lower at $3.82 per thousand cubic feet. According to the National Oceanic and Atmospheric Administration (NOAA), temperatures throughout the Northeast and Midwest should not be colder than normal through next week. As a result, demand for natural gas fired electricity is expected to remain at normal levels during the period.

The price of front month natural gas fluctuated from $3.78 to $3.92.

December gasoline also lost ground Tuesday, settling 3.5 cents lower to $2.16 a gallon. It traded from $2.14 to $2.20.

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Commodity Corner: Crude Oil Settles Flat after 25 Month High

Crude futures remained flat Thursday, pulling back from a 25 month high as data showed record oil demand in China. Light, sweet crude settled unchanged at $87.81 a barrel on the New York Mercantile Exchange. The futures price peaked at $88.63, the highest intraday price since Oct. 9, 2008, and bottomed out at $87.54. Industrial production in China grew by 13.1 percent in Oct. compared to the same period in 2009, increasing oil usage to 8.92 million barrels per day (bpd). According to the National Statistical Bureau, China's refineries hit record throughput at 8.27 million bpd. The 12.2-percent increase from Oct. 2009 to Oct. 2010 is a key bellwether of crude demand growth.

The Organization of Petroleum Exporting Countries (OPEC) also provided support for oil prices by raising its oil consumption forecast for 2010 and 2011. It increased its expectations from global oil demand to 1.17 million bpd from 120,000 for 2011. Analysts said trading volume was light Thursday due to Veteran's Day, a holiday for many in the U.S. Henry Hub natural gas, meanwhile, fell 12 cents to $3.93 per thousand cubic feet.

The Energy Information Administration (EIA) Thursday reported an increase of 20 million cubic feet of natural gas in U.S. stockpiles for the week ended Nov. 5. Total gas in storage has reached a record of 3.84 trillion cubic feet, 31 barrel cubic feet higher than the previous year. Analysts claim that due to milder weather, the demand for heating is not as high. Natural gas fluctuated between $3.92 and $4.13 Thursday. Meanwhile, gasoline futures for December delivery slipped by less than a penny Thursday to settle at $2.24 a gallon. Gasoline peaked at $2.25 and bottomed out at $2.23.

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Commodity Corner: Crude Oil Ends 6 Day Rally

Tuesday's crude futures ended a six day rally Tuesday, as the dollar strengthened against the euro. Crude reached a two year high of $87.63 earlier in the day, before ending Tuesday's trading session at $86.72 a barrel, a 34 cent drop. Oil bottomed out at $85.48. The euro strengthened and the dollar weakened earlier Tuesday following the sale of Greek Treasury bills. The greenback later rebounded amid concerns of European governments struggling to pay their debt. A stronger dollar causes dollar-denominated commodities to be more expensive for countries with other currencies.

Led by financial and consumer companies, the Standard & Poor's 500 Index declined 4.17 points, or 0.3 percent, while the ICE Dollar Index rose to 77.03 from 77.44. Meanwhile, front month natural gas prices increased to its highest levels since August 19, as heating fuel demand rose on cold weather anticipation. Forecasts showed below average temperatures across the U.S. from Nov. 14 to Nov. 22, as reported by the National Weather Service. Henry Hub natural gas rose 12.2 cents to settle at $4.21 per thousand cubic feet on the New York Mercantile Exchange.

According to the Energy Information Administration's (EIA) report, 2010 U.S. natural gas production should increase 2.5 percent from 2009 levels and 0.2 bcf a day for October's marketed natural gas production. The intraday range for natural gas was $4.06 to $4.23. RBOB gasoline for December contract also settled up Tuesday, adding 0.65 cent, to $2.19 a gallon the highest since Aug. 3. Gasoline prices fluctuated between $2.16 and $2.20 Tuesday.

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Commodity Corner: Crude Oil, Natural Gas Finish Higher

December crude oil finished higher for the sixth consecutive day Monday. Oil settled at $87.06 a barrel, a 21 cent gain from Friday, as traders contemplated positive U.S. employment numbers. On Friday, the U.S. Labor Department announced that nonfarm private sector employment increased by 151,000 jobs last month. The country's official 9.6 percent unemployment rate remained unchanged, though.

Also applying upward pressure on the oil futures price was a stronger dollar. The euro lost ground to the greenback amid market concerns about mounting sovereign debt problems in Ireland, Spain, and Portugal. Crude oil traded from $85.96 to $87.49.

For the second time in as many weeks, front month natural gas settled above the $4.00 mark, $4.09 per thousand cubic feet, to be exact. Despite an ongoing high inventory environment, predictions of below normal temperatures in the Northeast spurred speculation that demand for gas-fired electricity will increase over the next two weeks.

Natural gas for December delivery peaked at $4.10 and bottomed out at $3.94. December gasoline remained flat at $2.18 a gallon Monday. It traded within a range from $2.15 to $2.19.


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Commodity Corner: Crude Oil, Natural Gas, Gasoline End the Week Higher

The price of a barrel of crude oil continued its ascent for the fifth straight day Friday, settling 36 cents higher at $86.85.

Oil for December delivery, which had received a boost during the week from the U.S. midterm elections and the Federal Reserve's "Quantitative Easing 2" policy to stimulate the economy, got a boost Friday from new U.S. Department of Labor jobs figures. According to the Labor Department, nonfarm payroll private-sector employment increased by 151,000 jobs in October. However, the unemployment rate remained unchanged at 9.6 percent.

Crude oil traded from $85.96 to $87.22 Friday. Compared to Monday's settlement price, it is up 4.7 percent for the week.

December natural gas futures also ended the day higher, settling eight cents higher at $3.94 per thousand cubic feet. Colder weather forecasts have provided a boost to natural gas, countering the effect of high inventories. Friday's gas price, which ranged from $3.85 to $3.95 during trading, marks a 2.9 percent increase for the week.

Despite a steady string of increases throughout the week, gasoline for December delivery ended the day flat at $2.18 a gallon on Friday. Front month gasoline, which peaked at $2.19 and bottomed out at $2.16 during the day's session, finished the week up 4.3 percent.


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Commodity Corner: Crude Oil Soars as Dollar Tumbles

Crude oil climbed to a six month high Thursday as the dollar fell on news of the Fed's latest economic stimulus effort. Crude for December delivery added $1.80 Thursday, settling at $86.49 a barrel on the New York Mercantile Exchange (NYMEX). The Federal Reserve's decision to buy an additional $600 billion in bonds contributed to the dollar plummeting to a nine month low against the euro. The dollar has been weakening since late August in anticipation of additional quantitative easing. As more money is printed the value of the dollar weakens, leading to cheaper commodities for foreign currency holders. The greenback fell to $1.42 against the euro Thursday, the lowest since Jan. 20.

Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) bumped its global oil consumption estimates by 800,000 barrels a day for 2014. OPEC's 5.1 percent, or 89.9 million barrels a day, increase signifies a continuing recovery. Crude futures traded from $84.92 to $86.83 Thursday. Natural gas prices settled up 2 cents Thursday at $3.86 per thousand cubic feet on the NYMEX. Although the U.S. Energy Information Administration reported 67 billion cubic feet in gas inventories for the week ended Oct. 29, analysts predict traders buying gas futures ahead of cooler temperatures. Gas consumption increases in periods of extreme temperatures.

The intraday range for natural gas was $3.74 to $3.90. Gasoline prices also finished higher Thursday, settling 4.15 cents higher at $2.18 a gallon. December gasoline peaked at $2.18 after bottoming out at $2.14.

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Commodity Corner: Crude Oil Passes $85 Mark

December crude oil surged past $85.00 Wednesday, thanks in part to an expected move by the Federal Reserve that should have a bullish effect on oil. Oil settled 79 cents higher to end the day at $84.69 a barrel after peaking at $85.36 and bottoming out at $83.57. The Fed on Wednesday afternoon announced a decision to buy $600 billion in government debt by mid-2011.

The central bank's action, commonly called "QE2" to reflect the Fed's second attempt to stimulate the economy by printing more money through a policy of "quantitative easing," is meant to induce businesses and consumers to borrow more from lenders. Because more money will be in circulation, it should also devalue the dollar. Consequently, oil and other commodities priced in dollars are expected to become a better buy for those holding other currencies.

Also supporting oil was a weekly U.S. Department of Energy report observing that the country's gasoline stocks fell again last week. December gasoline futures consequently rose three cents to settle at $2.14 a gallon. According to the Energy Information Administration, U.S. gasoline inventories remain relatively high; however, they have declined sharply and continuously for five of the past six weeks.

EIA attributes the decline to reduced imports from Europe and Canada as well as higher than average domestic refinery outages in September and October. Gasoline traded from $2.11 to $2.15 Wednesday. Natural gas for December delivery slipped three cents to end the day at $3.84 per thousand cubic feet. During Wednesday's trading, natural gas traded within a range from $3.79 to $3.90.


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Commodity Corner: Crude Rallies Ahead of Fed's Stimulus Move

Crude futures rallied to a near six month high Tuesday as the dollar fell ahead of the U.S. Federal Reserve's anticipated decision to implement another stimulus plan. Light, sweet crude for December delivery rose 95 cents, settling at $83.90 a barrel. Analysts expect the Fed to announce a plan to purchase $500 billion of long term securities during its meeting this week. The plan is intended to accelerate growth, decrease unemployment, increase inflation, and boost flagging economic recovery. Economic growth or a weaker dollar contributes to an increase in oil prices.

Meanwhile, the ICE Dollar Index, which measures the dollar against six major currencies, slid to its lowest level in two weeks at $76.74. A weaker dollar increases the commodity's appeal, making it cheaper for foreign currencies to purchase. Crude futures fluctuated Tuesday between $82.83 and $84.34.

Due to cooler temperatures, natural gas for December delivery climbed up 3.8 cents to settle at $3.87 per thousand cubic feet. Analysts hope the colder weather will drive demand because U.S. inventory levels are nearing record levels this month. U.S. natural gas stockpiles at the end of last week were at 3.75 trillion cubic feet; the record high was reached in November at 3.84 trillion cubic feet. Natural gas traded between $3.75 and $3.93 Tuesday. Reformulated gasoline blendstock also settled higher, gaining 1.67 cents to reach $2.11 a gallon Tuesday. RBOB gasoline peaked at $2.12 and bottomed out at $2.09.

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Commodity Corner: Crude Oil Gets Boost from Manufacturing Figures

December crude oil settled 1.9% higher Monday on positive manufacturing news from China and the U.S. Front month oil rose $1.52 to end the day at $82.95 after the China Federation of Logistics and Purchasing (CFLP) announced the country's Purchasing Managers Index (PMI) for October was 54.7 percent. The latest figure is 0.9 percentage point higher than September's PMI. The indicator gauges China's manufacturing sector, and a figure above 50 percent signifies economic growth.

In the U.S., the Institute for Supply Management (ISM) reported that its own manufacturing indicator for October also called the "PMI" increased from 54.4 percent in September to 56.9 percent in October. ISM attributed the 2 1/2 percentage point gain to growth in new orders, production, and employment. Despite these improvements, however, ISM reported that supplier deliveries are slowing down and inventories are growing. Also, the 56.9 percent figure for October is still nearly 6 percent lower than the high for the past 12 months: 60.4 percent in April.

December crude oil traded within a range from $81.32 to $83.86 Monday. Natural gas futures, meanwhile, ended the day lower for the first time since last Wednesday. December natural gas fell 21 cents to settle at $3.83 per thousand cubic feet given abundant inventories and underwhelming demand. Also, warmer temperatures are expected to return to the Central and Eastern U.S. next week and thus further stave off increased demand for heating fuels.

The front month natural gas price fluctuated from $3.825 to $4.19 Monday. The December contract price for a gallon of gasoline rose three cents Monday to settle at $2.09 after trading from $2.06 to $2.13. The expired November contract ended the day Friday at $2.10.

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Commodity Corner: Crude Oil Settles Lower; Natural Gas Breaks $4.00 Mark

Crude oil for December delivery settled lower Friday after the U.S. Commerce Department reported a lower than expected gross domestic product (GDP) estimate for the third quarter of 2010. Oil ended Friday's trading session $81.43 a barrel, a 75 cent decline from the previous day. The Commerce Department stated earlier in the day that Real GDP grew 2.0 percent at an annual rate during the third quarter, below the 2.1 percent that the private sector anticipated. During Friday's session, oil peaked at $82.12 and bottomed out at $80.56. The commodity is down 1.3% compared to Monday's settlement price.

Natural gas continued to benefit from predictions of colder temperatures for much of the Central and Eastern U.S. through next week. The December futures price settled at $4.04 per thousand cubic feet Friday, a 15 cent gain from the previous day and a 21.7% improvement from Monday's settlement price; note that the November contract was still being traded Monday. Gas traded within a range from $3.83 to $4.035 Friday. The price of gasoline for November delivery fell by a penny Friday, settling at $2.10 a gallon. Gasoline, which is up nearly 1% for the week, traded from $2.07 to $2.13.

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Commodity Corner: Crude Oil Rises on Dollar Decline

The price of a barrel of crude oil for December delivery settled at $82.52 Monday, a 83 cent increase from the previous session. The increase stems largely from the weakening of the U.S. Dollar, which fell 0.34% against the euro Monday. Pending Federal Reserve action to increase the U.S. money supply in order to buy more federal government debt has placed downward pressure on the dollar. A weaker dollar tends to boost demand for oil from buyers holding other currencies.

Contributing to the bullish sentiment for oil was a report showing that existing home sales in the U.S. increased 10% last month. According to the National Association of Realtors, a housing recovery is occurring albeit in the early stages. An official with the trade group said the duration and impact of a foreclosure moratorium will influence how "choppy" the recovery will be. December crude traded from $81.45 to $83.28 Monday.

Milder than normal temperatures in typically heating depending U.S. regions such as the Northeast and Midwest have quashed demand for natural gas recently. Monday was no exception to this trend, with November natural gas settling a penny lower at $3.32 per thousand cubic feet. The front month gas price fluctuated between $3.29 and $3.40.

Labor unrest at French refineries and fuel depots is expected to reduce gasoline exports to the U.S. market. As a result, November gasoline futures rose two cents to settle at $2.08 a gallon. Gasoline peaked at $2.10 and bottomed out at $2.05.

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China's Oil Demand Rises on Year On Year Basis

China's apparent oil demand in September rose 5.1% year on year to 35.53 million metric tons (mt) or an average of 8.68 million b/d, according to Platts' analysis of data from the People's Republic of China. However, September demand is almost unchanged from August's 35.54-million-mt level. Meanwhile, China's apparent oil demand in the first nine months of the year totaled 317.7 million mt or an average of 8.52 million b/d, up 10.25% from the same period of 2009, according to Platts' data.

Chinese refiners processed a total 34.91 million mt or an average 8.53 million b/d of crude in September. This is up 6.35% from a year ago, but just 0.52% higher than August, according to data released by the country's National Bureau of Statistics on Oct. 21. The refiners' collective crude throughput from January to September was 310.74 million mt, 13.48% higher from a year ago. Chinese crude imports in September hit a new historic high of 23.29 million mt, or around 5.7 million b/d.

"The crude available to China in September, including domestic production and net imports, was 40.09 million mt, but the throughput was only 34.91 million mt. So a little over 5 million mt of crude presumably went into storage, the highest in a month so far this year," said Vandana Hari, Asia editorial director at Platts. "At the same time, China's monthly refined product imports continued to come off June's high of 3.64 million mt, while the country stepped up product exports last month. The flattening of implied oil demand in September could be a precursor to an easing of the country's runaway oil demand growth rate for the remainder of 2010."

Courtesy of Rigzone.Com



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