Author: SondraHunter

Total crude oil and petroleum products stocks climbed +0.70 mmb to 1062.94 mmb in the week ended October 21. Crude stockpile soared +4.74 mmb to 337.63 mmb as stocks PADD 3 and 5 increased significantly. Cushing stock climbed +0.42 mmb to 31.51 mmb. Utilization rate rose +1.7% to 84.8%.

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WTI Crude Fell Below 92 as Crude Stock Surged

A prominent feature in the oil market yesterday was that WTI crude oil closed at backwardation for the first time in 3 years. Moreover, the spread between WTI and Brent crude also narrowed to below 20/bbl. This was despite API’s report that crude oil inventory climbed more than expected last week. Concerning the financial market as a whole, profit-taking was seen ahead of the EU summit. As we mentioned yesterday, the potentially positive news should have been priced in over the past weeks.

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WTI Crude Returns to Backwardation for the First Time in 3 Years

WTI crude oil futures open Monday’s trading session at $88 a barrel as oil prices remain uncertain on concerns surrounding any firm European debt agreement later this week after the UK and French head’s of state fall out over the weekend.

Latest WTI Oil Price

US Light crude oil futures for December 2011 delivery was trading at $88.53 a barrel, 07.20 GMT this morning in electronic trading on the NYMEX. The US contract ended last week’s session at $87.60.

Euro Tensions

A bust up between head’s of state Cameron and Sarkozy held up the conclusion of the EU 27 summit for almost two hours, with the French president expressing rage at the constant criticism and lectures from UK ministers.

Sarkozy bluntly told Cameron: “You have lost a good opportunity to shut up.” He added: “We are sick of you criticising us and telling us what to do. You say you hate the euro and now you want to interfere in our meetings.”

Officials who witnessed the angry exchanges between Cameron and Sarkozy said the prime minister insisted that the package to be adopted on Wednesday by the 17 eurozone countries had serious implications for non euro countries in the EU and their interests must be safeguarded.

Oil prices, stock markets and currency traders remain on edge over the euro debt situation which will have a big impact as details emerge later this week on the path forward for the euro.

Originally posted here:
WTI oil futures trading at $88, Euro summit still in focus

WTI oil futures end a bullish trading week back near $88 a barrel as the US stock market rose higher, helping to lift oil and other commodity prices, whilst some analysts are also pointing to tightening US supplies as a driver of NYMEX oil prices.

WTI Oil Futures – Closing Price

US Light crude oil futures for December 2011 delivery ended the week’s trading session at $87.40 a barrel on the NYMEX.

US Stock Market

US stocks surged higher Friday and registered another weekly gain, following a batch of corporate earnings and ahead of this weekend’s European Union summit on the sovereign debt crisis.

The Dow Jones Industrial Average rallied 267.01 points, or 2.31%, to 11808.79, finishing the week up 1.4% and closing at its highest level since 3rd August.

Meanwhile, in its weekly inventory survey on Wednesday, the US EIA (Energy Information Administration) reported a larger than expected 4.7 million barrel drawdown of US crude oil stockpiles, bringing American oil inventories to their lowest level in nearly two years.

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WTI oil futures end week near $88 as US market helps lift prices

WTI oil futures open Thursday’s trading session back down around $85 a barrel as crude oil prices tumbled lower whilst further evidence of weak US economic growth undermined recent market gains.

Latest WTI Oil Price

US Light crude oil futures for December 2011 delivery was trading at $85.51 a barrel, 07.05 GMT this morning in electronic trading on the NYMEX. The US contract closed off yesterday’s trading session down 2.8 percent at $86.26.

Crude oil prices rose above $89 early in American trading on Wednesday, but reversed sharply amid concern the US economy remains wobbly with the US Fed reporting only a slight increase in consumer spending last month.

US Oil Stocks

Meanwhile, The US Department of Energy said that crude oil stockpiles fell by 4.7 million barrels in the week to 14th October, while analysts had forecast a rise of 1.1 million barrels.

“The large decline in crude oil stocks was totally unexpected and provided some support to the market.” said Sucden brokers analyst Myrto Sokou.

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WTI oil price tumbles back to $85 a barrel on weak US data

Total crude oil and petroleum products stocks slumped -10.92 mmb to 1062.24 mmb in the week ended October 14. Crude stockpile declined -4.73 mmb to 332.90 mmb as all PADDs recorded stock-builds. Cushing stock climbed +0.47 mmb to 31.09 mmb. Utilization rate dropped -1.1% to 83.1%.

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Oil Inventories Declined Across the Board

Market sentiment soured amid renewed worries over sovereign debt crisis in the Eurozone, stubbornly-high inflation in the UK and weaker-than-expected growth in China. Shares in Asia weakened while European bourses opened lower. Commodities fell across the board with oil, gold and base metals sliding on deterioration in market sentiment.

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Sentiment Deteriorated Further due to Disappointing Economic Data

Brent oil futures open Tuesday’s trading session back at $110 a barrel as continuing EU debt concerns drag crude oil prices lower, following weaker stock markets after German leaders warned that a comprehensive solution to the EU’s debt crisis may not be near.

Latest Brent Oil Price

In London, Brent crude oil futures for December 2011 delivery was trading as $110.39 a barrel, 05.10 GMT this morning on the ICE Futures Exchange. The contract closed yesterday’s trading session at $109.87 a barrel.

EU Debt Concerns

Stock markets headed lower on Monday after Government spokesman Stefan Seibert warned that dreams that everything will be resolved and dealt with by next Monday cannot be fulfilled, referring to the debt situation that clouds the eurozone.

The tone was a marked change from the weekend when, speaking after a meeting of G20 finance ministers and central bankers in Paris, French Finance Minister Francois Baroin said the eurozone answers at the summit would be “decisive”.

Finance ministers from the G20 largest economies had set the 23rd October meeting as the deadline for resolving Europe’s credit problems.

“I think everyone last week decided that the European crisis was over, that it was all going to get solved by the end of the month. Nobody should be hugely surprised because the process in Europe seems to be to promise alot and deliver a little and we’ve seen that for the last year and a half.” said Kate Warne at Edward Jones, St. Louis.

Brent Oil Price Forecast

“There will be substantial downside potential for oil prices, should the high expectations at the EU summit next weekend be disappointed.” according to Commerzbank.

Monday’s fall in Brent, as well as expiry of the November Brent contract Friday significantly narrowed the price spread between the world’s two main oil benchmarks, Europe’s Brent and the US’s WTI. It fell to $24.43 a barrel, down from a record high of $28.10 reached Friday.

But the current tightness in the undersupplied physical crude market in Europe continues to provide strong support to the price of Brent crude, said VTB Capital’s Andrey Kryuchenkov.

“Inventories have been contracting in the past month, mostly due to North Sea tightness as well as production disruptions in Nigeria and North America at a time when Libya’s output shortfall is not being fully compensated for by increased OPEC production.” he said.

Original post: 
Brent oil hangs at $110 as EU debt concerns drag oil prices lower

Financial markets strengthened in US session Friday as investors expected the G-20 summit would be a fruitful one in formulating measures to resolve the sovereign debt crisis in the Eurozone. Throughout the week, market sentiment generally improved despite further downgrades of credit ratings in European countries and banks. The market was thrilled as it awaited credible and effective solutions for the problems in the 17-nation region. All member countries have ratified the new EFSF.

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Weekly Fundamentals – Benefit of the Doubt to EU Leaders