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LONDON (Reuters) — Oil prices slipped toward 72 a barrel Friday as dealers took profits from a 5% rally earlier in the week and the U.S. dollar bounced from a near-one-year low.Crude for October delivery fell 43 cents to settle at 72.04 a barrel.”After being up for much of the week the market took a slight breather today and the dollar was able to show some strength,” said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.Oil prices started the week below 70 a barrel, then rose on strength in equities markets and heavy losses in the U.S. dollar that boosted the purchasing power of commodities buyers using other currencies.The ICE Futures U.S. dollar index, which tracks the value of the greenback, rose Friday from a near one-year low as investors covered short positions and softer equities in Europe and Asia cooled risk appetite.Oil was also under pressure from a government report this week showing growth in U.S. refined fuel inventories, with distillates at their highest levels since 1983.Oil’s losses were limited somewhat by mild gains on Wall Street, fueled by brokerage stocks upgrades. European and Asian equities slipped earlier Friday as recent hefty gains prompted investors to book profits.Some analysts said oil prices could move higher in coming weeks as some recent positive economic data supported expectations that a global economic revival was under way and energy demand would soon recover.”Momentum is starting to build for a break to the upside as there is mounting evidence of an improving global economy in general,” analysts at Barclay’s Capital wrote in a commodities research note.Another analyst, Tim Evans at Citi Futures Perspective, said that high stockpile levels and increased quota-busting by OPEC producers could produce the same basic conditions that set the stage for a 15 price drop in early July.Crude is up nearly 62% this year, but is still about 51% off its July 2008 record of more than 147.

NEW YORK: Oil prices have surged more than 50% from the start of the year, but don’t expect a return to triple digits anytime soon — worries about the pace of an economic recovery will continue to drive near-term volatility.”The market is manic right now,” said Phil Flynn, analyst at PFG Best. “This is more uncertainty than I’ve seen in a very long time: big rallies followed by big breaks, and that’s reflective of feelings about the overall economy.” Concerns about the recession — and more recently the timing of recovery — have translated into some big swings. Worldwide consumption faltered as the global recession took hold, sending prices lower. There have been signs of a recovery, but it won’t be a straight line. Just last month, prices swung from a 6% decline one day to a 6% gain the next. While that’s not a daily occurrence, it does signal some trepidation.On Wednesday, U.S. crude for September delivery rose 2.23, or almost 5%, to settle at 72.42 a barrel after a weekly government inventory report showed an unexpected drop in oil supplies.Weekly inventory reports typically influence crude prices, but lately the effect is more muted as other factors gain prominence.Mixed data stifle predictions. If the oil market is looking to economic reports for signs of recovery, the optimism barometer changes almost daily. Data in recent weeks have painted a mixed picture.Two recent reports, for example, signaled opposite directions: Industrial production saw its first rise in 9 months, but a measure of consumer confidence showed a surprise decline.”The data are confusing about the main question: Where are we at in the recession?” Flynn said. “One day we’re jubilant about better housing data, and the next day stocks plunge on bad retail sales. It’s all over the place.”Even a statement from the Federal Reserve, which said the economy is “leveling out,” contained a major caveat that activity would remain weak in the near term.Investors are left wondering whether the recovery is beginning, slowing, or even falling into a double-dip recession.”If the data continue to be mixed, we’ll see sideways movement in energy,” said James Cordier, president of Liberty Trading Group. “They’ll track the bounces.” He predicted that oil will trade within about a 5-7 range for the short term.”It’ll stick there until we’re clear on this recession,” Cordier said. “And at this point, who knows when that will be?”Stocks offset dollar pressure. Oil prices generally move in the opposite direction of the dollar, and in tandem with stocks. Lower crude prices typically push the greenback higher because oil is priced in U.S. dollars around the world. Conversely, crude investors look to the stock market to gauge when fuel demand will rebound. The dollar has fallen about 10% against a basket of currencies since stocks bottomed in early March, while the S&P 500 index has rebounded 45% off its lows. Both the foreign exchange market and global stocks have also seen day-to-day fluctuations based on data from around the world. Those influences are overtaking traditional supply and demand numbers in the oil market, Flynn said. Hurricane season looms. Meanwhile, hurricane season is unpredictable and can easily wreak havoc on the oil market if refineries get taken out or severely damaged. The National Hurricane Center has reported three storms — Ana, Bill and Claudette — that could affect oil production. Production disruptions boost supply worries and subsequently crude prices.Flynn said hurricane concerns may have driven up oil prices “a bit” as of late, but gains were limited because none of the three storms appear to pose an immediate threat.However, hurricane season has just begun and Cordier said he expects more storms will spark a rally in oil prices within the next 30-45 days.Meanwhile, the average price of gasoline slipped for the fifth consecutive day, to 2.628 a gallon from the previous day’s 2.634, according to motorist group AAA.China’s influence. News from the world’s third-largest economy has had a significant effect on markets around the globe in recent weeks, Cordier said. For example, a 5% drop in Chinese stocks on Wednesday pressured U.S. markets early in the session before Wall Street managed to recoup those losses. In the bond market, many analysts are concerned that major buyers of U.S. debt like China and other Asian central banks are losing their appetite for Treasurys. A Wednesday report from energy information provider Platts said Chinese oil demand rose 4.2% over last year, though Cordier noted the country has said it planned to stockpile commodities.

LONDON (Reuters) — Oil fell below 69 a barrel on Wednesday after a near 5% slump in Chinese shares sent doubts rippling through global markets about the strength of the world economic recovery.Prices had surged by more than 3% in the previous session on tentative signs oil demand could be picking up in the United States, the world’s largest energy consumer, but with investors’ desire to take on more risk again firmly linked to Chinese growth, confidence has been shaken.U.S. crude for September delivery was down 40 cents at 68.79 a barrel, off an earlier session low of 68.54. “The good news that has driven markets over much of the summer has been emanating from China, they seemed to be leading the return to global growth,” said Paul Harris, head of natural resources risk management at Bank of Ireland Global Markets.0:00
/2:42China’s internal decoupling”But this is going to be a patchy recovery as we emerge from such a sharp global slowdown — it’s not going to be in a straight line, even if this equity sell-off doesn’t really signal any fundamental changes to the outlook for oil.”Shanghai stocks tumbled to a two-month low and have slumped by around 20% in just two weeks but remain up by more than 50% so far this year.Oil prices had been supported by data released late on Tuesday from the American Petroleum Institute (API) showing U.S. crude oil stockpiles fell last week by 6.1 million barrels, against forecasts for a 1.3 million barrel build.U.S. distillate stocks rose by 1.5 million barrels, more than double what analysts had expected, while gasoline stocks fell less than forecast.The release of the more closely watched U.S. Energy Information Administration (EIA) data later in the day could confirm the American Petroleum Institute’s (API) bullish figures, and will determine the market’s trading tone for the rest of the week.”What’s keeping the market down is high U.S. inventories, which is a proxy for demand,” said Tony Nunan, risk manager at Tokyo-based Mitsubishi Corp.”If the EIA data confirms the API report, we could see the market head higher. The 76 level will be a top for the market in the medium term until we see further drawdowns in the inventories,” he added.The EIA figures will be released at 10:30 a.m. ET.Weather and OPECTraders also watched for storms in the Atlantic Basin but there was no immediate threat seen to U.S oil installations in the Gulf of Mexico.Hurricane Bill, the first of the 2009 Atlantic season, grew quickly into a major Category 3 storm on Tuesday and could strengthen as it curves north, likely missing the eastern United States as it passes Bermuda.Kuwait sees no need for OPEC to change oil supply targets at its meeting in September as the oil price is satisfactory, the country’s oil minister said on Wednesday.The Organization of the Petroleum Exporting Countries, supplier of over a third of the world’s oil, meets on Sept. 9 in Vienna to discuss supply policy.Oil prices have more than doubled so far in 2009, boosted in part by OPEC’s decision to cut supplies to the market.

Source:CNN

NEW YORK (Reuters) — Oil rose to over 69 a barrel Tuesday as stronger-than-expected earnings results lifted equities and boosted optimism about the economy.U.S. crude for September delivery rose 2.44 to settle at 69.19 a barrel with further support coming from the weaker dollar. “We are just taking our cues from the S&P and the dollar,” said Stephen Schork, editor of The Schork Report in Villanova, Pa.Two major retailers, Home Depot (HD, Fortune 500) and Target (TGT, Fortune 500), beat Wall Street expectations on Tuesday, lifting markets.The results offset government data that showed that U.S. housing starts and permits fell unexpectedly in July after increasing in June.Investors were also eyeing U.S. oil inventory data set to be released later Tuesday and Wednesday.An updated Reuters poll of analysts predicted crude stocks rose by 1.3 million barrels, the fourth weekly build in a row, as higher imports offset a slight increase in refinery activity.Distillate stocks were seen up 600,000 barrels and gasoline stocks down 1.1 million barrels.The Energy Information Agency will release its weekly inventory report Wednesday with analysts expecting more signs of weak U.S. demand. The American Petroleum Institute will release its inventory data Tuesday at 4:30 p.m. ET.Traders were also keeping an eye on storms in the Atlantic Basin, although there was no immediate threat seen to U.S. oil installations in the Gulf of Mexico, home to a quarter of U.S. oil output and 15% of its natural gas production.Forecasters said tropical rainstorm Ana may regain strength over the warm water of the eastern Gulf of Mexico later this week, but has little chance of becoming a hurricane over the next day or so as it crosses Haiti and Cuba.Hurricane Bill, the first hurricane of the 2009 Atlantic season, headed west-northwest over open ocean Tuesday, but it was uncertain whether it could threaten the northeast U.S. coast, far from Gulf Coast oil installations, by Sunday.

Source:CNN

LONDON, Aug 12 (Reuters) — Oil slipped towards 69 a barrel on Wednesday, falling for the fifth straight session, as growing concerns about the strength of demand pressured prices ahead of the release of weekly U.S. inventory data.World oil demand growth will be lower in 2010 than previously forecast, the International Energy Agency (IEA) said in its monthly market report on Wednesday, with evidence a global recovery is underway still limited.The Paris-based agency, adviser to 28 industrialized nations, said global oil demand was now seen recovering by just 1.3 million barrels per day (bpd) in 2010, having fallen by 2.3 million bpd this year as the economic crisis curbed consumption. World oil demand hit a peak of 86.5 million bpd in 2007.”Evidence of a bottoming out of the recession is still a bit patchy. The latest data on industrial production for some of the larger countries remains negative,” David Martin, analyst at the IEA, told Reuters.”There is not clear evidence yet we have seen the worst.”U.S. light crude for September delivery fell 25 cents to 69.20 a barrel, having lost 1.15 on Tuesday following Wall Street losses and after the U.S. Energy Information Administration (EIA) also revised down its oil demand forecast.InventoriesFalling demand for oil has seen inventories of crude and oil products stack up around the world.Combined with the impact of an insipid U.S. summer driving season, the drawdown in stocks typical of this time of year has not happened. The IEA said stocks in developed countries stood at almost 68 days of forward cover at the end of June.On Tuesday, weekly stocks data from the American Petroleum Institute (API) showed an unexpected fall of 1.4 million barrels in crude stocks, together with a larger-than-expected 2.3 million barrels fall in gasoline stocks.But the data, released after Tuesday’s prices settlement, failed to lift the oil market.”Today traders will be watching the Fed meeting and the EIA data. The stronger dollar and waning sentiment for equities have been short-term bearish for crude, which has been trading as an asset class recently,” said Jonathan Kornafel, Asia director of U.S.-based Hudson Capital Energy.The EIA, the statistical arm of the U.S. Department of Energy, will release its own weekly snapshot of U.S. fuel inventories at 10:30 a.m. ET.Data from the EIA and API can diverge widely.An expanded Reuters poll of analysts on Tuesday showed expectations of a 700,000-barrel rise in crude stocks, a 1.3-million-barrel increase in gasoline stocks and a 200,000-barrel drop in distillates stocks.Traders will also keep a close eye on the two-day U.S. Federal Reserve meeting that ends later on Wednesday with a statement expected at about 2:15 p.m. ET.

Source:CNN

LONDON (Reuters) — Oil prices crept up towards 71 a barrel on Tuesday, spurred by record fuel imports to the world’s second biggest energy user China, but the market was cautious ahead of the next sets of supply and demand data.Light, sweet crude for September deliver was up 13 cents to 70.73.Imports to China surged by 42% in July to a record 4.62 million barrels per day as refiners raised output.Traders are braced for monthly reports from the Organization of the Petroleum Exporting Countries and the U.S. government’s Energy Information Administration, which give insights into supply and demand.”The focus is going to be definitely on the demand and people will look for green shoots and upwards revision,” said Petromatrix analyst Olivier Jakob.The United States last Friday reported the first fall in the unemployment rate for 15 months, prompting some oil analysts to anticipate a faster economic recovery, which could revive oil demand.Analysts will also be watching weekly U.S. inventory data late on Tuesday, followed by weekly U.S. government data on Wednesday.The weekly data is expected to show gasoline stocks will have dropped by 1.5 million barrels in the week ending Aug. 7.Distillate stocks, including diesel, were also seen lower, but overall crude stocks were expected to fall as refineries cut run rates.Analysts said the slew of weekly and monthly reports had helped steer the focus back to the fundamentals of supply and demand, although financial factors were still a major consideration.For much of this year, the oil market has taken its cue from rallying equity markets and these have helped to tow prices up from lows of below 33 a barrel last December.”By the end of the week we will be back on to financials. It is these factors that are still in the ascendancy,” said analyst Simon Wardell of Global Insight, adding that a stronger dollar could cap gains on oil.A stronger dollar makes dollar-denominated commodities such as oil less attractive to non-dollar buyers.The dollar’s direction could depend on the policy-setting Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, although it is not expected to change interest rates in the near term.

Source:CNN

LONDON (Reuters) — Oil prices dipped below 71 a barrel on Monday, losing momentum after last week’s rally as traders focused on swollen inventories and prospects for a stronger dollar.U.S. crude was down 58 cents to 70.35 a barrel. Prices gained a modest 2% over the course of last week but closed lower on the day on Friday, following U.S. data that showed the first drop in unemployment in 15 months.That was regarded as raising the chances of higher interest rates before the year-end and gave a surprise boost to the U.S. dollar, although it weakened early on Monday against a basket of currencies.”The U.S. payrolls data would have been supportive for crude, but investors are now focusing on the strength in the U.S. dollar,” said David Moore, a commodities analyst at the Commonwealth Bank of Australia.For much of this year, oil prices have risen in line with gains on equities and have been negatively correlated to the dollar. A stronger dollar can be bearish for dollar-denominated commodities, which effectively become more expensive to non-dollar buyers.Analysts have said those relationships, which were only ever provisional, could have begun to shift as the market returns its focus to fundamentals of supply and demand.Tokyo shares hit a 10-month closing high on Monday, but European shares faltered after Friday’s broad-based rally.The MSCI world equity index edged up 0.1% after hitting its highest since October on Friday.Inventories still swollenDemand for fuel should recover, if the economic recovery suggested by this year’s stock market rally so far is to be believed, but in the immediate term inventories are still brimming.Although last week was overall positive for the oil price, the more striking movement was the rise in long positions, regarded as a bet on future price strength, reported by the U.S. regulator the Commodity Futures Trading Commission.0:00
/3:12Oil prices endanger recoveryIn a report released on Friday, the CFTC said crude oil speculators on the New York Mercantile Exchange had increased their net long positions sharply in the week to Aug. 4.”The price did not move a lot, but the week was very positive on the investment side,” said Olivier Jakob of Petromatrix. “The weekly additions to the long futures positions were at the highest level of the year.”That should underpin the oil price, which at above 70 is “not bad” from the standpoint of the Organization of the Petroleum Exporting Countries, the group’s president said over the weekend.The group next meets to consider output policy on Sept. 9 in Vienna.It has agreed to curb output by 4.2 million barrels per day from production levels last September and is delivering 71% of that pledge, a Reuters survey found.Leading exporter Saudi Arabia was expected to provide steady supplies in September compared with August to European refiners, industry sources said on Monday.

Source:CNN

LONDON (Reuters) — Oil edged down on Friday from a six-week high as markets looked to upcoming U.S. July employment data for clues on whether the U.S. economy could be emerging from recession.Light crude for September delivery fell 70 cents a barrel to 71.24 after briefly touching as low as 70.91.It settled 3 cents down on Thursday when lower U.S. stocks and a stronger U.S. dollar helped to pull prices off a six-week high of 72.42.”It has been a steady slip to the downside most of the morning. The BOE announcement yesterday put a little bit of gloom into the market,” said Tony Machacek, a broker with Bache Commodities in London.On Thursday the Bank of England took a far bigger step than expected to boost Britain’s recession-hit economy and stunned markets by expanding its quantitative easing plan to 175 billion pounds from 125 billion.Weekly gainOil prices are still on course for their fourth straight up week as economic confidence has grown, boosting riskier assets and knocking the dollar.For much of this year, oil prices have been unusually closely correlated to stock markets and Friday’s bearishness coincided with weaker equities as investors grew cautious before the U.S. non-farm payrolls data.”The market still looks fairly resilient,” analysts at MF Global wrote in their daily energy report.”However, at this stage, much rides on what U.S. equities will do over the next few weeks, as they have indisputably been the upside driver for most commodity complexes.”A Reuters poll on Wednesday showed the U.S. jobless rate might hit a 26-year high of 9.6% when July nonfarm payrolls data comes out on Friday, but an improvement over June with 50,000 fewer jobs lost outright.Fundamental shadowOil analysts were also wary of very bearish fundamentals as U.S. inventories have stayed very high and demand has been weak.Apart from the swollen inventories on land, oil stocks have built up at sea.The world’s biggest independent oil tanker shipping group Frontline on Thursday said around 50 very large crude carriers (VLCCs) were storing nearly 100 million barrels of crude at sea, particularly in the U.S. Gulf and Europe.”We continue to see sizeable risks to the downside for crude in the near-term as weaker demand for crude will add to already weak fundamentals for the complex,” said JP Morgan analysts in a weekly oil report.”That said, our longer-term outlook is considerably more positive as the expected boost in demand for the second half of the year will begin to cut back on commercial inventories around the world.”Oil already costs more than twice the level in December when it plunged to below 33, although it is less than half last July’s record above 147.

Source:CNN

NEW YORK (Reuters) — U.S. oil prices fell back slightly from a six-week high on Thursday, pulled lower by weakness on Wall Street and gains in the U.S. dollar.U.S. crude fell 3 cents to settle at 71.94 a barrel, after touching a peak of 72.42 earlier in the day, the highest since late June.”This price action still looks like a pause in a short-term bull market from our perspective,” said Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois.The losses came amid losses on Wall Street as drops in telecommunications and biotechnology stocks offset optimism about the economy. Oil prices have tracked equities markets closely in recent months.Adding downward pressure, the U.S. dollar made headway against other currencies, lowering the purchasing power of holders of other currencies.0:00
/3:08Regulating oil marketsOil prices have climbed sharply from lows near 30 last winter as dealers anticipated an eventual rebound in the global economy that could revive ailing world energy demand.But the rally in recent months has come even as depressed demand levels bulk up oil stockpiles in the biggest consumer nations.U.S. crude inventories rose by a much-higher-than-expected 1.7 million barrels in the week to July 31, according to data from the U.S. Energy Information Administration on Wednesday.The premium of ICE Brent futures to U.S. crude increased on Thursday and was as high as 3.99 a barrel, helped by summer maintenance in the North Sea and high U.S. inventories at Cushing, Oklahoma.Analysts said that gains in Brent were also due to a lower perceived regulatory risk on ICE, following calls for greater scrutiny of commodities trading in the United States.The U.S. Federal Trade Commission on Thursday announced new rules aimed at curbing energy market manipulation. Meanwhile, the U.S. Commodity Futures Trading Commission has been studying position limits in energy markets to clamp down on speculation.The UK Financial Services Authority and the UK Treasury also met with oil industry representatives this week to discuss market transparency and regulation, but issued no statement.

Source:CNN

LONDON (Reuters) — Oil fell towards 70 a barrel on Wednesday after U.S. government inventory data showed a build in crude stocks and weak economic data raised doubts about oil demand recovery in the world’s largest energy consumer.U.S. light, sweet crude fell 81 cents to 70.61 a barrel, giving away some of the gains that helped oil rise 13% since late last week.U.S. crude inventories rose more than expected last week as refinery runs eased, while distillate stocks showed a surprise draw, according to weekly data from the U.S. Energy Information Administration (EIA) released on Wednesday.Crude stockpiles in the world’s top consumer rose by 1.7 million barrels in the week to July 31, against forecasts for an 800,000-barrel build as refinery utilization fell by 0.1 percentage point to 84.5%.”The big build on crude caught some people by surprise and shows overall weakness in the economy and the unwinding of economic optimism. Nothing in the numbers was very bullish,” said Phil Flynn, analyst at PFGBest Research in Chicago.The EIA data followed inventory numbers on Tuesday from the American Petroleum Institute, which showed crude stocks fell 1.5 million barrels last week but gasoline stocks rose by a further 2.1 million barrels.Oil was already lower before the release of inventory figures as doubts over economic recovery and demand for fuel resurfaced after weak U.S. services sector data depressed stock markets both sides of the Atlantic.Expectations that a turnaround in the global economy could lift sagging oil demand has helped send crude up from lows below 33 a barrel in December, with energy traders keeping an eye on equities markets for signs of an economic rebound.Investors were awaiting news from a meeting between trade representatives and Britain’s financial powers, the UK Financial Services Authority (FSA) and the UK Treasury, which comes before a third Commodity Futures Trading Commission (CFTC) hearing in Washington over how to rein in speculation.The UK meeting will discuss market transparency and efficiency, according to the FSA invitation to oil market participants, a copy of which has been seen by Reuters.Energy traders also were watching an area of thunderstorms in the Atlantic Ocean several hundred miles southwest of the Cape Verde Islands associated with a tropical wave. The U.S. National Hurricane Center said it had less than a 30% chance of becoming a tropical storm.

Source:CNN