Author: pletcherpls

Read more here:
Gold firms on as dollar weakens with Fed policy meet in focus

According to Reuters’ calculation, the implied oil demand in China slipped -0.8% m/m to 9.71M bpd in April. From a year ago, demand added +1.1% due to a low base last year as demand had decelerated from elevated levels reached in the first quarter at that time. For the first 4 months of the year, oil demand gained +0.4% y/y to 9.9M bpd.

The rest is here:
Chinese Oil Demand eased in April. Rise in Crude Imports Signaled SPR Buildup

US Light crude oil futures are back in the spotlight again after analysts said that the US EIA may report later today a fall in crude oil supplies after 10 consecutive weeks of gains for the US contract, which could point to stronger demand and higher prices.

Latest WTI Oil Price

US Light crude oil futures for January 2014 delivery was trading at $97.25 a barrel (or 1.1 percent higher) at 10:14 GMT this morning in electronic trading on the NYMEX. US Light crude futures rose $2.22 to $96.04 on Tuesday after TransCanada said the southern leg of its Keystone XL pipeline should be operational early next month.

US Oil Supply and Demand

US stockpiles data for the week ended November 29 is expected to show a decline of 1.25 million barrels in US crude oil stocks according to a survey of analysts by Platts. After markets closed yesterday evening, the US API (American Petroleum Institute) said that American crude oil inventories fell by 12.4 million barrels in the week ended November 29, compared to expectations for a decline of only 1.25 million barrel.

Traders have been concerned over rising US crude oil inventories and increased production levels in recent weeks. US crude oil inventories have totaled 391.4 million barrels as of last week, the most since June, while domestic output hit 8.02 million barrels a day, the highest level in almost 25 years.

Read more:
US WTI oil price surges 3 percent higher to $97 on crude supply fears

US markets slumped, following declines in Asian and European sessions. The focus was in China’s banking sector although Fed’s exit plan would remain a key overhang in the medium-term. Wall Street plummeted with the DJIA and S&P 500 indices losing -0.94% and -1.21% respectively.

Read more from the original source: 
Sentiment Dampened by Chinese Banking Sector

The price of a barrel of Brent crude oil seems overvalued at it’s current rate mainly due to ample supply and inventories, together with a strong US dollar which is holding ground against major currencies and remains a safe haven for a percentage of investors.

Latest Brent Oil Price

In London, European ICE Brent crude oil futures for July 2013 delivery was trading at $102.40 a barrel, 07:50 GMT on the ICE Futures Exchange. The contract fell 35 cents to $102.64 a barrel on the ICE Futures exchange in London yesterday.

OPEC – Oil Supply & Demand

Yesterday, crude oil prices were pressured lower by OPEC’s disclosure that its members boosted production by 106,000 barrels a day in May. Some experts feel the world already has an ample supply to meet current demand.

“Oil prices have slid back after OPEC increased crude output in May while at the same time keeping its 2013 demand forecast unchanged on concerns about the demand outlook,” said Michael Hewson of CMC Markets in an email commentary.

OPEC’s monthly report, which marginally cut the global oil demand growth forecast for 2013 by 10,000 barrels a day from last month’s report. OPEC warned that “risks are skewed towards the downside” for demand. “This is due largely to the weak economic outlook for Europe, as well as to any possible setbacks in the US economic recovery,” it said, adding “the current forecast is subject to downward revisions not only in the OECD but also in emerging economies.”

Meanwhile, the US API (American Petroleum Institute) showed a weekly increase in US crude oil stocks by nearly 9 million barrels for the week ending June 7, while expectations had been for no change, according to a Platts survey.

“The American Petroleum Institute data was bearish, featuring a sharp 9.0 [million barrels] build in commercial crude oil inventories on lower refinery runs and much higher imports than anticipated,” according to Tim Evans, at Citi Futures and OTC Clearing, in emailed comments.

More closely watched data from the US Energy Information Administration is due out later today at 15:30 GMT.

US Dollar & Oil Prices

The US dollar historically has a big impact on the price of oil and other commodities and as seen in May, the US Dollar Index hit 84 levels, capping Brent crude oil at around $100 to $105 per barrel mark. In the last two weeks we have seen the index loose around 4 percent but oil prices have not risen in tandem with those losses.

With crude oil inventories gaining, together with a strong US dollar, it seems that there can be only one way for Brent oil to trade in the short term and that would be lower.

View original here:
Brent oil price seems overvalued due to ample supply and a strong US dollar