Crude Oil Rises for a Sixth Day on Iran’s Nuclear Speculation

Crude oil rose a sixth day in New York on speculation Iran’s nuclear plans threaten Middle East stability and an offer to resign by Italy’s Prime Minister Silvio Berlusconi brings Europe closer to solving its debt crisis.

Futures advanced as much as 0.5 percent, matching the longest run of gains since the six days ended Nov. 8, 2010. The U.S. may pursue additional sanctions against Iran following release of a United Nations report that concludes the Islamic Republic was working to develop a nuclear weapon, according to two U.S. officials. Fuel stockpiles fell last week, the American Petroleum Institute said yesterday.

“This current supply shock potential that the markets are looking at with Iran has pushed the price well above our outlook,” said David Lennox, a resource analyst at Fat Prophets in Sydney, who had forecast oil to trade from $80 to $90 a barrel. “The situation in Europe will still take some time for the corrective activities to flow through to the real economy”.....Read the entire Bloomberg article.


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Oil Falls From 14 Month High on Unexpected U.S. Supply Gain

Crude oil fell from a 14 month high after a U.S. Energy Department report showed that supplies unexpectedly increased as refineries reduced operating rates and imports gained. Stockpiles climbed 1.33 million barrels to 327.3 million in the week ended Jan. 1. Supplies at Cushing, Oklahoma, where New York traded West Texas Intermediate oil is stored, surged to the highest level since tracking began in 2004. Imports rose to the highest amount since November as refinery utilization rates dropped to the lowest total since that month.

“This report shows that there is plenty of crude oil on hand,” said Michael Fitzpatrick, vice president of energy with MF Global in New York. “There are also enough shut refinery units to meet any increase in fuel demand.” Crude oil for February delivery dropped 50 cents, or 0.6 percent, to $81.27 a barrel at 10:47 a.m. on the New York Mercantile Exchange. Oil traded at $82.47, the highest since Oct. 14, 2008, before the release of the report at 10:30 a.m. in Washington. Prices are up 67 percent from a year ago. Stockpiles of crude oil were forecast to decline 1 million barrels, according to the median estimate of 15 analysts surveyed by Bloomberg News.....Read the entire article.

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Oil Inventories Saw Huge Declines Across the Board

The inventory report by the US Energy Department surprised the market as crude inventory fell -4.84 mmb to 327.5 mmb in the week ended December 18. The draw was significantly more than market expectation and represented the third consecutive decline. Although stockpile at Cushing, Oklahoma rose +0.57 mmb, the pace of increase has moderated and should narrow the discount of WTI crude to Brent crude.

Distillate stockpile declined -3.03 mmb, following a -2.95 mmb draw in the prior week. This is the second consecutive weekly fall. The market anticipates further draw in coming weeks as the weather gets abnormally cold. Gasoline inventory dipped -0.88 mmb to 216.3 mmb, offsetting the build in the previous week.

Rally in crude oil price accelerated after the report. The benchmark contract surged to 76.53, the highest in 3 weeks. For oil products, heating oil price jumped to 2.038 while RBOB gasoline also climbed to 1.965.....Here is the charts!

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Oil Little Changed Around $78 on Forecast U.S. Supplies Grew

Crude oil was little changed around $78 a barrel in New York before a report forecast to show that U.S. crude inventories expanded for a third week. An Energy Department report due tomorrow will probably show that U.S. stockpiles of crude oil rose 1.5 million barrels last week, according to a Bloomberg News survey. Analysts forecast that supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, declined last week.

“It’s overvalued and it may be time for a correction,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. “The fundamental picture is bearish. Demand outside China is still weak and global stockpiles are ample.” Crude oil for December delivery was at $78.55 a barrel, down 13 cents, at 8:49 a.m. London time. Yesterday, it dropped 2.3 percent to close at $78.68 a barrel on the New York Mercantile Exchange, the biggest decline since Sept. 24 and the lowest settlement since Oct. 16. Prices have gained 76 percent this year and reached a one- year high of $82 a barrel on Oct. 21......Read the entire article.

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Commodities Consolidate as Economic Outlook is Mixed

Crude oil price plunged to as low as 68.32 Friday as the US Labor Department reported disappointing employment data for September. Investors worried the pace of economic recovery will be delayed and thus took profits from long positions in oil. Although buying interest emerged afterward, WTI crude oil settled -1.2% at 69.95 during the day. On weekly basis, the benchmark contract gained +6%. After plummeting to the lower end of recent trading range of 65-75, oil price recovered in the middle of the week although the US Energy Department reported larger than expected crude builds in the week ended September 25.

Investors used the surprising draw in gasoline stockpile, lower than expected rise in distillate stockpiles and rise in fuel demand as reasons to bid up prices. However, we retain out views that crude oil price will continue move range bounded in coming weeks and occasional rise in demand does not alter the fact that fuel consumptions remain in depressed levels. Gasoline demand rose to 9.126M bpd last week, representing increases of +3.8% on weekly basis and +4.5% on annual basis. However, Exxon's CEO said that gasoline demand has already peaked in 2007 and will decline into the futures. In the US, oil product demand was 20M bpd in 2007 and should fall to about 17M bpd by 2020.....Read the entire article and charts!