As expected, oil prices consolidated in a narrow range Wednesday morning, easing modestly at noon, only to rise strongly after the opening of NYMEX session, supported by equity markets riding higher on optimism over President Obama's 300 billion dollar jobs plan and a German court ruling that upheld the first Greek bailout package and the creation of the European Financial Stability Facility. When oil prices breached resistance lines in the process, automatically triggered technical buying orders pushed the oil complex even higher. In after-hours trading, WTI crude later leaped above 90.00 a barrel for the first time since early August, lifted by the API report showing a bigger-than-expected draw in U.S. oil inventories last week and the formation of a new tropical storm in the Gulf of Mexico. The Brent breached the 115,85 dollar resistance line.
ICE Gasoil contract for September delivery settled at 966,75 dollars on Wednesday. This was 27,50 dollars above Tuesday's settlement. With some 34.900 contracts the traded volume was below average.
After tropical storm Lee has left the Gulf with some refinery shutdowns and oil rigg evacuations, tropical storm "Nate" formed west of Campeche, with little movement expected for today. Mexico's two principal crude oil export ports, Dos Bocas and Cayo Arcas, were closed Wednesday afternoon as a precaution. Meteorologists forecast that Nate could strengthen into a hurricane by the end of this week and could track northward where it may affect US oil installations.
After the victory of the rebels over Gaddafi Libyan oil production slowly increases day by day, yet IEA analysts forecast that pre-war output will not be restored before the year 2013. 85% of Libyans pre-war exports went to Europe. When exports were halted after the civil war broke out, the Brent-WTI spread rose dramatically and the price for the Brent was above 110,00 dollars for a barrel for most of the time since then.
EIA monthly energy outlook:
In its most recent energy outlook, the EIA revises down its earlier estimates on oil use and economic growth both in the world and in the USA
• 2011 global oil use seen +1,6% vs year-ago figures at 88.20 m b/d
• 2012 global oil use seen +1,6% vs year-ago figures at 89.59 m b/d
• 2011 US oil use seen -0,9% vs year ago
• 2012 US oil use seen +0,3% vs year ago
• World economic growth in 2011 +3,1%
• World economic growth in 2012 +3,8%
• US economic growth in 2011 +1,6%
• US economic growth in 2012 +1,9%
• 2011 4th quarter world oil use seen +1,5% vs year-ago at 89.13 m b/d
• The average price of a barrel of WTI crude in 2011 is seen unchanged vs earlier estimate at 100 dollars
• The average price of a barrel of WTI crude in 2012 is seen at 103 dollars (-4,00 dollars vs earlier estimate)
The Euro weakened against the dollar before President Obama is to showcase proposals to spur job growth and the U.S. economy. Prospects Obama’s plans will make it less likely that Federal Reserve Chairman Ben S. Bernanke will add to monetary easing supported the greenback temporarily. The European currency edged lower against its U.S. counterpart on speculation European Central Bank President Jean- Claude Trichet will signal a less aggressive stance toward inflation. Obama, who has recently launched his campain for re-election in 2012, will address a joint session of Congress today on proposals to speed job creation that may inject more than $300 billion into the economy next year. However, the Euros early losses have been limited so far by the briefly weakening Swiss Frank (versus the European currency).
Currently the euro trades at 1,4073. Supports are seen at 1,4050 dollars, 1,4010 dollars, 1,3990 dollars and 1,3970 dollars, resistances are seen at 1,4205 dollars, 1,4170 dollars, 1,4150 and 1,4105 dollars.
ICE gasoil for September delivery is expected to open 12,00 to 13,00 dollars up at about 952,50 dollars/ton after settling at 939,25 dollars Tuesday night. This was 5,25 dollars above Monday's settlement. Volume with some 38.400 contracts below average.
U.S.
Nymex Access gaining: Oil futures are trading modestly higher in East Asia and Globex electronic trading this morning, taking their breath after Tuesday's late rally. In the absence of any important economic indicators, market participants will eye the dollar and equity markets for direction. The traded volume is below average.
US crude stocks fell more than expected last week when simultaneously refinery utilization dropped. The draw in gasoline stocks is in line with economists' expectations and the surprise build in distillates isn't attached much value at this time of the year. Consequently the data are seen slightly bullish.
API data: crude oil -3.0 million barrels, distillates +4.0 million barrels, gasoline -0.9 million barrels, refinery utilisation -1.2%, Cushing -0.4 million barrels.
Forecasts: crude oil -1.1 million barrels, distillates -2.0 million barrels, gasoline -0.8 million barrels, refinery utilisation -0.9%
Houston (ex-wharf indications 7-9)
380cst $630
180cst $674
MGO $960
Very tight avails for 180 cst
New Orleans (ex-wharf indications 7-9)
380cst $633
180cst $679
MGO $965
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is continuing to climb on the back of a strong stock market with WTI +$1.79. Singapore paper is now losing a touch of momentum with +$7.95 for 180cst and +$7.45 for 380cst for Sep, and for Oct 180 cst +$8.70 and +$8.25 for 180cst with MGO Sept contracts at +$0.97 and for Oct at +$0.81. The cargo market bottoming out now as it lags behind is reflecting yesterday's drops fully now, losing with 180cst -$0.23, 380cst +$0.15 and MGO -$0.56.
The Singapore fuel oil markets did not have much change; was flat during the Platts window. Bunker demand was said to be generally average. The delivered bunker premiums were around $6.50 above cargo prices yesterday.
High premiums for prompt deliveries.
380 cst $655
180 cst $665
MGO $945
Rotterdam
Indications for delivered bunkers:
380cst : $ 654
(1.0 %) :$ 673
180cst: $ 679
(1.0 %):$ 698
MGO 0.1%S: $ 968
