Crude oil fell for a third day in New York after a U.S. government report showed fuel demand declined last week and as Enbridge Energy Partners LP prepared to start a pipeline after repairs, easing supply concerns. Crude dropped after the Energy Department said gasoline demand tumbled 2.6 percent to 9 million barrels a day, the lowest rate since the week ended March 12. Enbridge said it will start preparations to flow oil through a pipeline linking Canada and refineries in the U.S. Midwest early tomorrow. Manufacturing in the New York area expanded slower than forecast, signaling economic growth may falter.
“We’re not seeing as much consumption as we thought,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “There is an oversupply of oil.” Crude for October delivery fell as much as $1.02, or 1.3 percent, to $75 a barrel in electronic trading on the New York Mercantile Exchange. It was at $75.24 at 2:45 p.m. Singapore time. Yesterday, the contract slipped 78 cents, or 1 percent, to $76.02. Futures have declined 5.2 percent this year.
Prices fell after the Federal Reserve Bank of New York’s general economic index slumped to 4.1 this month, the lowest since July 2009, from 7.1 in August. Economists expected the reading to climb to 8, according to a Bloomberg News survey. Houston based Enbridge won’t restart its Line 6A until the Pipeline and Hazardous Materials Safety Administration is satisfied with the company’s repair and safety plans, administration spokesman Damon Hill said in an e mail.....Read the entire article.
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Thursday, September 16, 2010
Wednesday, September 15, 2010
Disaster in The Gulf....Government Gives Notice on Abandoned Platforms
The Obama administration on Wednesday launched plans to clean up "idle iron" in the Gulf of Mexico, requiring companies to dismantle deserted platforms and permanently plug thousands of abandoned oil and gas wells, including some that are decades old. The mandate will affect nearly 3,500 nonproducing wells and require the decommissioning of about 650 unused oil and gas production platforms.
Interior Secretary Ken Salazar said the move is part of a broader push to boost environmental protections and the safety of offshore energy production. "We have placed the industry on notice that they will be held to the highest standards of planning and operations in developing leases," Salazar added.
For years, environmentalists and industry analysts have been highlighting the problem of "idle iron", the glut of abandoned rigs, platforms and wells in the Gulf that are no longer in use. And the new rule was in the works long before the April 20 explosion of the Deepwater Horizon rig.
But the disaster inspired fresh scrutiny of the problem and spurred concerns that the aging infrastructure poses environmental risks, especially during hurricanes. Michael Bromwich, the director of the new Bureau of Ocean Energy Management, Regulation and Enforcement, said the rule responds to that threat.
"This initiative is the product of careful thought and analysis," he said, "and requires that these wells, platforms and pipelines are plugged and dismantled correctly and in a timely manner to substantially reduce such hazards." The mandate, set to go into effect Oct. 15, represents a change in the government's handling of abandoned platforms and wells. Until now, federal decommissioning requirements forced companies to remove infrastructure and plug wells within a year after their individual offshore.....Read the entire article.
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Interior Secretary Ken Salazar said the move is part of a broader push to boost environmental protections and the safety of offshore energy production. "We have placed the industry on notice that they will be held to the highest standards of planning and operations in developing leases," Salazar added.
For years, environmentalists and industry analysts have been highlighting the problem of "idle iron", the glut of abandoned rigs, platforms and wells in the Gulf that are no longer in use. And the new rule was in the works long before the April 20 explosion of the Deepwater Horizon rig.
But the disaster inspired fresh scrutiny of the problem and spurred concerns that the aging infrastructure poses environmental risks, especially during hurricanes. Michael Bromwich, the director of the new Bureau of Ocean Energy Management, Regulation and Enforcement, said the rule responds to that threat.
"This initiative is the product of careful thought and analysis," he said, "and requires that these wells, platforms and pipelines are plugged and dismantled correctly and in a timely manner to substantially reduce such hazards." The mandate, set to go into effect Oct. 15, represents a change in the government's handling of abandoned platforms and wells. Until now, federal decommissioning requirements forced companies to remove infrastructure and plug wells within a year after their individual offshore.....Read the entire article.
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Is Exxon The #1 Oil Stock
Dan Dicker, senior contributor for TheStreet, breaks down oil's recent rally and defends his love for Exxon.
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Crude Oil Bulls Struggle to Maintain Their Advantage, Here's Wednesdays Closing Numbers
The S&P 500 index closed higher on Wednesday as it extended the rally off August's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that additional gains are possible near term. If December extends the aforementioned rally, June's high crossing at 1122.90 is the next upside target. Closes below the 20 day moving average crossing at 1077.12 would confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 1122.30. Second resistance is June's high crossing at 1122.90. First support is the 10 day moving average crossing at 1099.20. Second support is the 20 day moving average crossing at 1077.12.
Crude oil closed lower due to profit taking on Wednesday as it consolidates some of the rally off August's low. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends the rally off August's low, the 62% retracement level of the August decline crossing at 78.58 is the next upside target. Closes below the 20 day moving average crossing at 74.47 would temper the near term friendly outlook. First resistance is Monday's high crossing at 78.04. Second resistance is the 62% retracement level of the August decline crossing at 78.58. First support the 20 day moving average crossing at 74.47. Second support is August's low crossing at 70.76.
Natural gas closed higher on Wednesday as it extended Tuesday's breakout above the 20 day moving average. The mid-range lose sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If October extends this week's rally, the 25% retracement level of the June-August decline crossing at 4.102 is the next upside target. Closes below the 10 day moving average crossing at 3.866 would temper the near term friendly outlook. First resistance is today's high crossing at 4.060. Second resistance is the 25% retracement level of the June-August decline crossing at 4.102. First support is the 10 day moving average crossing at 3.866. Second support is August's low crossing at 3.697.
The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of this week's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, August's low crossing at 80.75 is the next downside target. Closes above the 20 day moving average crossing at 82.94 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.51. Second resistance is the 20 day moving average crossing at 82.94. First support is Tuesday's low crossing at 81.24. Second support is August's low crossing at 80.75.
Gold closed lower due to profit taking on Wednesday as it consolidated some of Tuesday's rally. Stochastics and the RSI are overbought, diverging but are turning bullish again signaling that sideways to higher prices is possible near term. If December extends the rally off July's low, upside targets will now be hard to project following yesterday's rally to a new contract high. Closes below the reaction low crossing at 1237.90 would confirm that a double top with June's high has been posted. First resistance is Tuesday's high crossing at 1276.50. First support is the 20 day moving average crossing at 1245.90. Second support is the reaction low crossing at 1237.90.
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Crude oil closed lower due to profit taking on Wednesday as it consolidates some of the rally off August's low. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends the rally off August's low, the 62% retracement level of the August decline crossing at 78.58 is the next upside target. Closes below the 20 day moving average crossing at 74.47 would temper the near term friendly outlook. First resistance is Monday's high crossing at 78.04. Second resistance is the 62% retracement level of the August decline crossing at 78.58. First support the 20 day moving average crossing at 74.47. Second support is August's low crossing at 70.76.
Natural gas closed higher on Wednesday as it extended Tuesday's breakout above the 20 day moving average. The mid-range lose sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If October extends this week's rally, the 25% retracement level of the June-August decline crossing at 4.102 is the next upside target. Closes below the 10 day moving average crossing at 3.866 would temper the near term friendly outlook. First resistance is today's high crossing at 4.060. Second resistance is the 25% retracement level of the June-August decline crossing at 4.102. First support is the 10 day moving average crossing at 3.866. Second support is August's low crossing at 3.697.
The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of this week's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, August's low crossing at 80.75 is the next downside target. Closes above the 20 day moving average crossing at 82.94 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.51. Second resistance is the 20 day moving average crossing at 82.94. First support is Tuesday's low crossing at 81.24. Second support is August's low crossing at 80.75.
Gold closed lower due to profit taking on Wednesday as it consolidated some of Tuesday's rally. Stochastics and the RSI are overbought, diverging but are turning bullish again signaling that sideways to higher prices is possible near term. If December extends the rally off July's low, upside targets will now be hard to project following yesterday's rally to a new contract high. Closes below the reaction low crossing at 1237.90 would confirm that a double top with June's high has been posted. First resistance is Tuesday's high crossing at 1276.50. First support is the 20 day moving average crossing at 1245.90. Second support is the reaction low crossing at 1237.90.
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Only a Handful of Investors Truly Understand
Think of it as light heavy oil, thick and gooey enough that it needs a pump to get out of the ground, but not so thick that it needs expensive heating to flow, hence the name cold flow. Now when I say that cold flow heavy oil is the most profitable, I mean that producers get more profit per barrel (the netback) than from other types of oil.
For every dollar producers put in the ground to get the oil, they get anywhere from $3-$7 back, sometimes up to $11, compared to $1-$3 for light oil. That's due to two factors:
1. The heavy oil is shallow so it doesn't cost much to get out, and
2. U.S. refineries love Canadian crude as Mexico and Venezuela heavy oil production declines, so heavy oil prices in Canada are now strong
And Canada has more of this oil than anyone else in the world. The real opportunity comes from the fact that right now, at this very moment, only a few junior and intermediate producers focus on cold flow heavy oil. That will soon change and as a result, investors will see a host of explosive new profit opportunities as this massive Canadian resource gets developed.
But make no mistake, the biggest, juiciest profits will come from those companies who are already in the cold flow heavy oil game. I've just prepared a new research report that examines three fast growing producers who stand to provide early investors with astounding returns as a result of this opportunity.
This new report, "North America's Heavy Oil and 3 Junior Heavy Oil Producers Set to Explode", spells out all the details, including:
* A detailed explanation of heavy oil and how big the market for it might be * How new technology will impact the market and create new opportunities for forward-thinking investors in the coming months * Why we're in the midst of extraordinary times for Canadian heavy oil producers and how long these good times might last * And most importantly, the names of three carefully selected junior/intermediate Canadian heavy oil producers perfectly positioned to take advantage of this unique market scenario.
You can claim your copy of this detailed report "North America's Heavy Oil and 3 Junior Heavy Oil Producers Set to Explode", immediately via email by clicking the link below.
While this report includes the type of research that might ordinarily cost hundreds of dollars, and includes three stocks with triple digit profit potential. But don't delay, as word begins to spread of the opportunity in cold flow heavy oil, the stocks revealed in this report will begin to move up sharply and I wouldn't want you to miss out.
Click here to order your copy of this in-depth report right now!
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For every dollar producers put in the ground to get the oil, they get anywhere from $3-$7 back, sometimes up to $11, compared to $1-$3 for light oil. That's due to two factors:
1. The heavy oil is shallow so it doesn't cost much to get out, and
2. U.S. refineries love Canadian crude as Mexico and Venezuela heavy oil production declines, so heavy oil prices in Canada are now strong
And Canada has more of this oil than anyone else in the world. The real opportunity comes from the fact that right now, at this very moment, only a few junior and intermediate producers focus on cold flow heavy oil. That will soon change and as a result, investors will see a host of explosive new profit opportunities as this massive Canadian resource gets developed.
But make no mistake, the biggest, juiciest profits will come from those companies who are already in the cold flow heavy oil game. I've just prepared a new research report that examines three fast growing producers who stand to provide early investors with astounding returns as a result of this opportunity.
This new report, "North America's Heavy Oil and 3 Junior Heavy Oil Producers Set to Explode", spells out all the details, including:
* A detailed explanation of heavy oil and how big the market for it might be * How new technology will impact the market and create new opportunities for forward-thinking investors in the coming months * Why we're in the midst of extraordinary times for Canadian heavy oil producers and how long these good times might last * And most importantly, the names of three carefully selected junior/intermediate Canadian heavy oil producers perfectly positioned to take advantage of this unique market scenario.
You can claim your copy of this detailed report "North America's Heavy Oil and 3 Junior Heavy Oil Producers Set to Explode", immediately via email by clicking the link below.
While this report includes the type of research that might ordinarily cost hundreds of dollars, and includes three stocks with triple digit profit potential. But don't delay, as word begins to spread of the opportunity in cold flow heavy oil, the stocks revealed in this report will begin to move up sharply and I wouldn't want you to miss out.
Click here to order your copy of this in-depth report right now!
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Phil Flynn: A Trillion Reasons To Buy Oil May Not Be Enough
A trillion dollars in printed money and oil still can’t close higher! Ok, well maybe it hasn’t happened yet but the rumors of another trillion in quantities easing from the Fed as well as a multitude of other factors sent gold soaring to an alltime high and other commodities soaring.
What also seemed to help was this perception that with the reelection of Japan’s Prime Minister Naoto Kan's in the Democratic Party of Japan leadership, it could be less likely that Japan will intervene in the yen. WRONG!!! The yen seemed to taunt the prime minster hitting a 15 year high against the dollar and only then the Japanese finally said enough is enough and intervened in the yen for the first time in 6 years.
Reuters News quoted Finance Minister Yoshihiko Noda as saying, "Japan intervened in the currency market as the impact of the yen's rise on the economy could not be ignored and that Japan would continue to take action, but that it had been acting alone.” Reuters said that estimates on how much yen selling Japan had done in Asia varied widely.
Dealers cited talk of 300-500 billion yen ($3.6 billion-$6 billion) although some reports put it closer to 100 billion yen. Of course prior to the intervention and while gold and silver were flying high, oil sagged on the fact that.....Read the entire article.
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What also seemed to help was this perception that with the reelection of Japan’s Prime Minister Naoto Kan's in the Democratic Party of Japan leadership, it could be less likely that Japan will intervene in the yen. WRONG!!! The yen seemed to taunt the prime minster hitting a 15 year high against the dollar and only then the Japanese finally said enough is enough and intervened in the yen for the first time in 6 years.
Reuters News quoted Finance Minister Yoshihiko Noda as saying, "Japan intervened in the currency market as the impact of the yen's rise on the economy could not be ignored and that Japan would continue to take action, but that it had been acting alone.” Reuters said that estimates on how much yen selling Japan had done in Asia varied widely.
Dealers cited talk of 300-500 billion yen ($3.6 billion-$6 billion) although some reports put it closer to 100 billion yen. Of course prior to the intervention and while gold and silver were flying high, oil sagged on the fact that.....Read the entire article.
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Saudi Arabia Set to Raise Crude Oil Production
2 major themes dominating the market are Japanese government's unexpected intervention of yen and Fed's extension of QE by increasing bond purchases. Gold consolidated in Asian and European sessions after rallying above 1270 yesterday. Outlook remains firm and is likely to extend gains to 1300. Crude oil weakened for a second day and is currently trading below 76. Despite OPEC's downward revision on demand for the cartel's oil, Saudi Aramco said that it's ready to boost production as consumption in emerging markets expands.
With the exception of China, most Asian stocks surged as led by Japan's Nikkei Stock Average which added +2.34%. Japan's measures to curb yen's appreciation revived optimism on the country's export-driven economy. For the first time in 6 years, the BOJ intervened by buying dollar and selling yen as the country's currency has surged to the highest level in 15 years. The action was a surprise to the market as it's widely expected Naoto Kan, the re-elected Prime Minister, is less aggressive in curbing yen's appreciation. That said, the impact of the intervention should not last for long as it appeared to be carried out unilaterally, rather than in collaboration with other central banks.
China's stocks fell amid speculations that the country may raise banks' capital adequacy ratios to as high as 15% by 2012 and the government will accelerate restrictive measures to boost energy efficiency in coming months.
At an interview with the Globe and Mail, a Canadian newspaper, Khalid al-Falih, head of Saudi Aramco, Saudi Arabia's state oil company, said he expects global demand for crude oil to rise, mainly from from China and India, and the company is ready to boost production to meet any increase. The comments appeared to be in contrast with OPEC's monthly report that lowered the demand for the cartel's output by -0.1M bpd and -0.2M bpd for 2010 and 2011 respectively as non OPEC production increased. We believe Khalid's saying aimed at reducing the country's spare oil capacity.
Saudi Arabia, which produces 8.5M bpd and has the capacity for an output of 12.5M bpd, is looking to increase output by about +2M bpd over the next 5 years, thus trimming the spare capacity 2M bpd. According to OPEC's September report, the 11 members bearing quotas produced 26.799M bpd, bringing the compliance level +0.9% higher to 53.5%, in August.
The US government will report industrial production which probably grew +0.3% m/m in August, following a +1% growth in the prior month. Capacity utilization rate should have climbed to 74.9% in August from 74.8% in July. The Empire State manufacturing index is expected to have crawled higher for a second month to 9 in September after plummeting to a 7-month low of 5.1 in July.
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With the exception of China, most Asian stocks surged as led by Japan's Nikkei Stock Average which added +2.34%. Japan's measures to curb yen's appreciation revived optimism on the country's export-driven economy. For the first time in 6 years, the BOJ intervened by buying dollar and selling yen as the country's currency has surged to the highest level in 15 years. The action was a surprise to the market as it's widely expected Naoto Kan, the re-elected Prime Minister, is less aggressive in curbing yen's appreciation. That said, the impact of the intervention should not last for long as it appeared to be carried out unilaterally, rather than in collaboration with other central banks.
China's stocks fell amid speculations that the country may raise banks' capital adequacy ratios to as high as 15% by 2012 and the government will accelerate restrictive measures to boost energy efficiency in coming months.
At an interview with the Globe and Mail, a Canadian newspaper, Khalid al-Falih, head of Saudi Aramco, Saudi Arabia's state oil company, said he expects global demand for crude oil to rise, mainly from from China and India, and the company is ready to boost production to meet any increase. The comments appeared to be in contrast with OPEC's monthly report that lowered the demand for the cartel's output by -0.1M bpd and -0.2M bpd for 2010 and 2011 respectively as non OPEC production increased. We believe Khalid's saying aimed at reducing the country's spare oil capacity.
Saudi Arabia, which produces 8.5M bpd and has the capacity for an output of 12.5M bpd, is looking to increase output by about +2M bpd over the next 5 years, thus trimming the spare capacity 2M bpd. According to OPEC's September report, the 11 members bearing quotas produced 26.799M bpd, bringing the compliance level +0.9% higher to 53.5%, in August.
The US government will report industrial production which probably grew +0.3% m/m in August, following a +1% growth in the prior month. Capacity utilization rate should have climbed to 74.9% in August from 74.8% in July. The Empire State manufacturing index is expected to have crawled higher for a second month to 9 in September after plummeting to a 7-month low of 5.1 in July.
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Credit Suisse Analyst is Bullish on Two Engineering and Construction Firms
A Credit Suisse analyst is bullish on two engineering and construction companies, saying the prospects for new oil and natural gas contract awards are improving.
Analyst Jamie Cook called shares of Fluor Corp. and Foster Wheeler AG "top picks" in a note to investors on Wednesday. The companies build infrastructure to ship natural gas, and their shares have been depressed because natural gas prices have been relatively low. Natural gas prices are trading around $4 per 1,000 cubic feet on the New York Mercantile Exchange. That's higher than the same time last year but only about half of what natural gas traded for in 2008.
Cook said prospects for new contract awards and additional backlog for oil and natural gas work "should ramp up in 2011," citing private industry sources. "Areas of optimism include Saudi Arabia, Abu Dhabi, Australia, Brazil, India, China and Iraq, but longer term," Cook said. Cook maintained an "Outperform" rating on Fluor with a $56 price target. He maintained the same rating on Foster Wheeler with a price target of $31. Shares of Fluor fell 9 cents to $48.85 in morning trading. Shares of Foster Wheeler fell 18 cents to $24.22.
From INO.Com/AP
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Analyst Jamie Cook called shares of Fluor Corp. and Foster Wheeler AG "top picks" in a note to investors on Wednesday. The companies build infrastructure to ship natural gas, and their shares have been depressed because natural gas prices have been relatively low. Natural gas prices are trading around $4 per 1,000 cubic feet on the New York Mercantile Exchange. That's higher than the same time last year but only about half of what natural gas traded for in 2008.
Cook said prospects for new contract awards and additional backlog for oil and natural gas work "should ramp up in 2011," citing private industry sources. "Areas of optimism include Saudi Arabia, Abu Dhabi, Australia, Brazil, India, China and Iraq, but longer term," Cook said. Cook maintained an "Outperform" rating on Fluor with a $56 price target. He maintained the same rating on Foster Wheeler with a price target of $31. Shares of Fluor fell 9 cents to $48.85 in morning trading. Shares of Foster Wheeler fell 18 cents to $24.22.
From INO.Com/AP
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Crude Oil Technical Outlook For Wednesday Morning
Crude oil was lower overnight as it consolidates some of the rally off August's low. Stochastics and the RSI are overbought and are turning neutral warning bulls to use caution as a short term top might be in or is near.
Closes below the 20 day moving average crossing at 74.47 would confirm that a short term top has been posted. If October extends the rally off August's low, the 62% retracement level of the decline off August's high crossing at 78.58 is the next upside target.
First resistance is Monday's high crossing at 77.50
Second resistance is the 62% retracement level off August's high crossing at 78.58
Crude oil pivot point for Wednesday morning is 77.00
First support is the 10 day moving average crossing at 75.27
Second support is the 20 day moving average crossing at 74.47
The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010
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Closes below the 20 day moving average crossing at 74.47 would confirm that a short term top has been posted. If October extends the rally off August's low, the 62% retracement level of the decline off August's high crossing at 78.58 is the next upside target.
First resistance is Monday's high crossing at 77.50
Second resistance is the 62% retracement level off August's high crossing at 78.58
Crude oil pivot point for Wednesday morning is 77.00
First support is the 10 day moving average crossing at 75.27
Second support is the 20 day moving average crossing at 74.47
The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010
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Tuesday, September 14, 2010
Commodity Corner: Pipeline Outage Continues, But Oil Ends Lower
October oil futures edged lower Tuesday despite fears of a prolonged shutdown of a key Enbridge pipeline that carries crude oil from Canada to the U.S.
Crude prices settled at $76.80 a barrel, a 39 cent decrease from the previous day's trading session. The continued shutdown of Line 6A of Enbridge's Lakehead System near Chicago is providing support for oil prices. Line 6A, which can carry up to 670,000 barrels a day from Canada to the upper Midwest, will not be allowed to restart until U.S. government regulators deem it safe. Already causing a sharp increase in gas prices across the region, investors fear the supply disruption could begin to drain U.S. oil inventories.
Additionally, sluggish economic growth in Germany applied downward pressure to crude futures. A survey revealed lower than expected German investor sentiment, and industrial production in the euro area was flat in July, according to EU's statistics office. Analysts suggest that despite China's booming economy, mixed economic conditions in the U.S. and Europe have kept price increases in check.
The intraday range for October crude was $76.21 to $77.99 a barrel.
Meanwhile, natural gas for October delivery rose 2.8 cents Tuesday to settle at $3.97 per thousand cubic feet. The third price increase in as many trading days supports speculation that the days of lower natural gas futures may have passed for the season. However, some analysts are being cautious and are not declaring a seasonal rally yet. Gas prices were threatened earlier Tuesday on forecasts of storm clusters forming in the Gulf of Mexico, but no immediate storm threats have been seen, steering clear of production outages. Natural gas
fluctuated between $3.84 and $4.02 Tuesday.
RBOB gasoline settled lower at $1.97 a gallon, peaking at $2.00 and bottoming out at $1.96.
From the staff at Rigzone
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Crude prices settled at $76.80 a barrel, a 39 cent decrease from the previous day's trading session. The continued shutdown of Line 6A of Enbridge's Lakehead System near Chicago is providing support for oil prices. Line 6A, which can carry up to 670,000 barrels a day from Canada to the upper Midwest, will not be allowed to restart until U.S. government regulators deem it safe. Already causing a sharp increase in gas prices across the region, investors fear the supply disruption could begin to drain U.S. oil inventories.
Additionally, sluggish economic growth in Germany applied downward pressure to crude futures. A survey revealed lower than expected German investor sentiment, and industrial production in the euro area was flat in July, according to EU's statistics office. Analysts suggest that despite China's booming economy, mixed economic conditions in the U.S. and Europe have kept price increases in check.
The intraday range for October crude was $76.21 to $77.99 a barrel.
Meanwhile, natural gas for October delivery rose 2.8 cents Tuesday to settle at $3.97 per thousand cubic feet. The third price increase in as many trading days supports speculation that the days of lower natural gas futures may have passed for the season. However, some analysts are being cautious and are not declaring a seasonal rally yet. Gas prices were threatened earlier Tuesday on forecasts of storm clusters forming in the Gulf of Mexico, but no immediate storm threats have been seen, steering clear of production outages. Natural gas
fluctuated between $3.84 and $4.02 Tuesday.
RBOB gasoline settled lower at $1.97 a gallon, peaking at $2.00 and bottoming out at $1.96.
From the staff at Rigzone
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