Tuesday 30 August 2011

Oil Improves as US Consumer demand Improves

August 30th, 2011: Oil prices rose to $87 a barrel in Asia as oil demands in the US improved. Benchmark oil for October delivery witnessed a hike by 22 cents reaching to $87.49 in the electronic trading of the New York Mercantile Exchange. Crude oil settled at a considerable high of $87.27 on Monday 29th August.
Brent Crude in London for October delivery was also high at $112.30 on the ICE Futures exchange. Three weeks back crude was at $76, 16 percent lower than what it is today. This low price was owing to a widespread apprehension that the EU and the US economies might slip into a period of recession.
He month of July according to Commerce Department, witnessed a sharp rise in consumer spending which accounts to nearly 70% of the economic activity of a nation and this is perhaps the biggest in the last 5 months. Global stock markets too saw increase in spending. For instance the Dow Jones industrial average rose by 2.2 percent, and there were overall gains in most of the Asian stock markets.
With growing economic demands for oil crude oil is expected to head for a low, as apprehended by a few analysts. In Nymex trading, heating oil rose to 0.8 cents and reached to $3.03 a gallon, while gasoline gained 0.6 cents a gallon.
Also in conclusion to the final draft of a major deal between oil giants, most of the big energy companies of the world will have to surrender gas from Iraq’s southern oil fields, to a project led by Shell.
Overall a better week after about three weeks that were full of speculations and worries, with floods in the US and political instability prevailing in Iraq, oil prices last week were dismal, but a sunny morning seems not far.

Monday 29 August 2011

Hellish Hurricane in New York City Affecting Crude Oil

Eastern Canada witnessed a tropical and then post-tropical storm with heavy rains and winds, that killed more than 20 people in the US. Five million homes were rendered powerless while businesses were choked with floods everywhere. Though New York expected a recovery of train services, it was definitely a slow one. Most of the rail services that started from the north were out. Even though Wall Street and ground zero, preparing for 10th anniversary of September attacks, were largely unaffected, business was low. Markets traded lower volumes.
London Brent Crude for October delivery was low by 23 cents and was at $111.13 on the Futures exchange, ICE. There are so far no reported damages to oil refineries. The hurricane is expected to impact the local regional activities depending on power, as it could take a little longer than expected to recover.
Crude traded close to $85 in the past week, after moving between, $84 to $115, with evidences for an economic slowdown severing further. The National Hurricane Center reported that the hurricane sustained a speed of 50 mph while they approached the Canadian border.
World stock markets however rose, amidst this natural phenomenon. The comments by Federal Reserve Chairman Ben Bermanke were the prime reason behind it. He expected a help from the government in his Wyoming speech on stimulating economy from recession.
Heating oil fell to #3.01 per gallon in Nymex trading for October while gasoline futures dropped off to $2.76 a gallon.

Thursday 25 August 2011

Increase in oil price

Oil prices rose on Wednesday 24th August 2011. Benchmark West Texas crude rose 75 cents to $86.19 per barrel in New York, while Brent crude was up $1.34 at $110.65 per barrel in London.
The Government reported that orders for long lasting, durable goods like autos and aircraft increased 4% in July, the biggest increase since March this report increased the price. Another reason for increase in a price is the nation’s oil supplies dropped by 2.2 millions barrel by last week.

SEB Commodity Research said that, oil prices could drop temporarily if the crisis in the oil-rich North African nation eases or if strongman Muammar Gadaffi is caught. “Markets have really held back their gains today”. Price initially shot higher on Wednesday after the release of data showing US durable goods orders. Oil and gas companies have successfully diversified their upstream business line. According to Edinburgh based Wood Mackenzie released on Monday, unconventional oil and gas, liquefied natural gas, and deep water oil and gas now make up about 50% of the future value of the international energy  giants, which is a Whopping $3.2 trillion.

As oil price is falling in New York the price pf dollar is increasing and the gold plunged the most in more than three years. Goldman Sachs analyst believe that the oil prices will rise in the next year, they told that the risk of US recession has risen, but their revised US economic outlook remain consistent  with a recovery at a slower pace, “which is typical following a housing bust.”
After seeing oil prices, investors must grapple with political protests in the world’s top oil exporter, Saudi Arabia, and the impact of the biggest earthquake on record to strike Japan. In coming week, crude market will be looking for clearer information on the condition of the Libyan oil and gas infrastructure says Sanjeev Gupta.


Oil Enters a new Phase with the Libyan crisis heating up

On August 25, 2011: U.S supply report gave mixed signs about the demand for crude oil after this report oil prices hovered above $85 a barrel in Asian market. There is an extreme fluctuation in oil prices over the last few months.

US economy slowed sharply in the first three months of the year as high gas prices cut into consumers spending. Inventories of gasoline jumped 6.4 million barrels last week and distillates rose 2.0 million barrels. Prices have fallen from near $115 in May. BNP Paribas said in his report that the market has gone through a shift with the emergence of talk of double dip recession.

A major reason for the slump in oil prices is the economic austerity measures adopted by European countries. Oil has fallen recently along with stocks because of concern about the global economy. France gets 2.5% of its global production from Libya, is seen as a particular threat due to France leading role in international community to the rebel cause.

World economic growth has been revised down to 3.7%  in 2011 to 4.0% in 2012.this was mainly due to revision in the US forecast, which was cut to 1.8% from 2.5% in 2011 and 2.3% from 2.9% in 2012.

Product market sentiment showed a moderate recovery last month, with product cracks moving upwards across the globe supported by stronger Latin American import requirement. Gasoline demand has been weaker then expected in the Atlantic basin. Economies’ worries have affected the oil demand in the US; the aggregate oil demand will see a further decline this year.

Markets continue to monitor developments in Libya in order to asses how quickly oil production in the country would return to pre-war levels.

Oil fluctuates while Economies Watch Out

August 24, 2011: Market analysts are closely watching the price of crude oil because of the uncertainty associated with it brings frequent fluctuations. American petroleum institute said that crude inventories fell 3.3 million barrels last week. The energy information arm of McGraw hill Cos. had predicted an increase of 2.0 million barrels.

Oil prices rose on Tuesday as traders monitored the crisis in oil rich Libya, with rebels claiming victory and capturing Moamer kadhafi’s heavily fortified compound. Today oil prices hovered above $85 a barrel in Asia after a U.S supply report gave mixed signs about demand for crude.  

Banks had lowered their average crude price forecast- to $92 for the third quarter and $98 for the fourth quarter. Lipow said that The European refineries have struggled to make up for the production loss despite an increase from Saudi Arabia. As a result, European market should see the first and most significant drops in oil prices.

As oil is traded in dollars it tends to rise as the greenback weakens and makes crude less expensive for investors holding foreign money. The dollar dropped after the report that manufacturing activity in China and Europe was better than expected.

Benchmark West Texas Intermediate crude, for October delivery witnessed a rise by $1.67% or 2%, to $86.9 per barrel in afternoon trading in New York.  

 A report by the Goldman Sacs Group Inc. points to seriously “tight supplies” in the year 2012, and laments on the fact that not much can be done about this, because increasing production from countries like Saudi Arabia also seems rather difficult.

Tuesday 23 August 2011

Oil Markets react as battle rages in Libya

August 23rd, 2011: Libyan rebels have overthrown successfully Moammar Gadhafi, a long time dictator; sparking analyst remarks immediately, that say the oil will trickle back in the market in few more months. But to return back substantially might take few years.
This event pushed benchmark oil up for upcoming October delivery by $1.34%, reaching $85.76 in the New York Mercantile Exchange’s electronic trading. London witnessed a 29 cents increase in Brent Crude thus reaching to $108.65 on ICE futures exchange.
The oil infrastructure in Libya is massively damaged leading to a sharp fall in crude output from 1.5 billion barrels a day to 60,000 barrels. A recent report by Goldman Sachs apprehends Libya’s oil production to average to 250,000 barrels a day by the coming year.
If the production of crude increases in Libya, analysts expect Brent to drop back below $100 and reach $85 by the year 2012. However with Brent crude prices plummeting further it is rather unlikely that there would be markets flooded with oil.
In Nymex trading for October contracts, heating oil rose by 2 cents and climbed to $2.93 per gallon whereas gasoline futures were at $2.71 per gallon. Brent is more affected by the Libyan crisis as compared to the WTI. The West Texas Intermediate, light sweet crude increased by $ 1.29 cents for October delivery.
Thus a Manoucher takin, a senior petroleum analyst at the Center for Global Energy Studies in London says, the return of Libyan oil production will in fact be a gradual process.


Oil finishes at a low for August 3rd Week, 2011

With enough speculations and prayers, oil this week had but one trend, to fall. The end of the week saw fear of another US recession on its way, taking the oil to about 4 percent lower, for the last week. Nevertheless Benchmark Crude maintained its last year’s lowest point of $71.63 a barrel last August. Benchmark West Texas International crude for delivery this September fell by 12 percent and finished at $82.26 a barrel on the Mercantile Exchange New York.
Since April, this trend is persistent, and might offer some respite at the gas pumps, disregarding other factors however. Apprehending an uncertain global economy, stocks for major indexes also plummeted by more than 1 percent.
The dwindling Crude got a partner on Friday with dollar weakening further and creating a new record against the Japanese Yen since World War II. A weak dollar will however make it easier for traders to buy commodities and oil, since all of them are priced in dollars.
The current trend of the commodities markets, especially oil, has instigated speculations that the year 2012 will experience a tighter oil supply. The IEA’s announcement in June to release strategic oil reserves to the markets, such a measure however is typical in times of crisis or in the times of war.
A report by the Goldman Sachs Group Inc. points to seriously “tight supplies” in the year 2012, and laments on the fact that not much can be done about this, because increasing production from countries like Saudi Arabia also seems rather difficult.
The world population is rising every minute, and thus a simple fact that comes to most minds and foreseen by a UN report earlier this year is: higher demands, but sadly supplies would go on dwindling further.

Friday 19 August 2011

Oil Prices Plummet further raising concerns

August 18, 2011: The end of the third week of August saw oil prices plummeting further to touch a $81 a barrel in Asian Markets, this was parked off by a growing concern that the slowing down of the global economy would further undermine the crude oil’s demand in the market. 

The weakening US economy was the prime reason behind the tumbling markets. There are apprehensions that the US economy is heading towards recession, has resulted in a steep fall in the commodities especially oil. Crude oil sales dropped to an all time low since last two years, in Philadelphia- area manufacturing. 

Investors’ sentiments further played on with the concerns of growing EU’s debts and that the European banks may have difficulties in funding. Experts are apprehending further falls in the commodity markets, due to newer financial shocks. The world economy seems to be tumbling without little signs of recovery until the oil prices weaken further. 

London witnessed a fall in Brent crude by $1.53, reaching 4105.49 a barrel, as listed in ICE Futures exchange. US Crude CLc1 fell by 2%, arriving at stalling $79.17 a barrel, averaging down to an altogether of 16% for this entire month so far, a record fall since December 2008.

In the midst of falling oil prices, safer assets like gold witnessed a record all time high since two years. Gold however would ride the high tide, with more disappointments emanating from the markets. 

The markets especially crude tripping further down makes, Tony Nuanan, manager of risk at Mitsubishi Corp Japan, remark that the downfall could plunge further and the overall weak economy shows little but symptoms of a bullish oil run.

According to Capital Economics, Brent is expected to fall and reach $85 during the coming year. however the optimistic view forecasts a stronger demand for crude in US in the coming phase.



Crude oil falls


Crude oil prices plunged from a recent two day high in New York, apprehending a drop in oil demands due to the weakening of the US economy. The US presently is the highest consumer of oil. Falling crude oil also took along with it the future markets by about .6%. 

This has furthered the growing concerns about the improper health of the economies of the US and the European countries. There are modest developments expected in the same until the end of this year. Moreover Crude oil is being apprehended to fluctuate within a range of $80 to $100 in this span of time. 

This faltering in the crude oil trade and the subsequent fall in the equities markets, particularly of Asian markets, is a sign of a momentary turbulence though. The economies of US as well as of European countries have been striving hard to control such fluctuations and the speculations associated with it. The market seemingly however has two choices to fall or to rise, and a few days fall will definitely better the situation on the third day. 

Crude oil’s delivery for this September has dropped by 56 cents to $87.02 per barrel in the New York’s Mercantile Exchange’s electronic trading.

Further US crude oil inventories have witnessed a rise to 354 million in the week that ended on August 12th as per the reports prepared by the Energy Department.  The nation’s Strategic Petroleum Reserve is letting out huge stocks in close coordination with the Paris based International Energy Agency. 

An overall failure of crude oil to breach chart resistance is a clear implication of prices to decline further.

Wednesday 17 August 2011

Stumbling Oil Prices and the slow recovery


11th August, 2011: A volatile week, is about to exit leaving behind a trail of faltering markets and economy. The toiling recovery spiced up the scenario further. The oil prices last week fluctuated in about $6 range, while the economic news poured in. the future of the American currency – dollar and the euro left several experts speculating, while concerns for the US and EU’s economic growth further gathered momentum.

The week begun with crash in the equity markets, resulting in oil prices tumbling down by $7 per barrel in New York and $10 per barrel in London. The mid week saw an average of 6.3 percent loss. Parallel crude oil in New York reached an all time low of $82.87, lowest in the last eight months. Little repair was witnessed by the end when the prices closed at $86.88, offering some respite.

The US Debt further downgrading, might lead to the dollar plunging deeper and oil getting some hike. Regardless of newer austerity measures being implemented in the US and EU, they both seemingly have reached a crux from where there is little scope for financial stimulation and similar quantitative measures. 

Amidst the turmoil, Saudi Arabia reported an increase in production of oil; however most of it is being used up domestically for the production of electricity, leaving little for global exports. Tehran on the other hand is struggling amidst issues of low production and the fall in revenues, thereby planning to put up a lower quota pledge before a special OPEC meet. 

For more details check out http://www.ventrumenergy.com