Author: SondraHunter

WTI oil futures open Wednesday’s trading session higher, near $89 a barrel whilst the latest weekly US oil inventory figures showed that American crude oil supplies unexpectedly jumped last week, a sign demand may be weakening.

Latest WTI Oil Price

US Light crude oil futures for October 2011 delivery was trading at $88.73 a barrel, 08.20 GMT this morning in electronic trading on the NYMEX.

US Oil Inventories

The US API (American Petroleum Institute) said late on Tuesday that US crude oil inventories rose 5.1 million barrels last week while analysts had predicted a drop of 1.2 million barrels.

“Inventories continue to build, which gives us the real state of play in the market. I don’t think prices will go higher, I think we’re in a range and we’re just testing the top side of that.” said Jonathan Barratt, a managing director of Commodity Broking Services, Sydney.

US crude oil supplies rose to 352 million and are currently about 3.8 percent above the 5 year average.

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WTI oil trading near $89 whilst US inventories climb higher

The 3 national oil giants in China reported earnings results for the first half of the year. Net profits in CNOOC gained +51% y/y in 1H11, outperforming Sinopec’s +9% and PetroChina’s +1% gains. Incomes in the 2 refiners were dragged down by the refinery sector in which margins were squeezed by high crude oil prices. CNOOC has benefited from high oil prices as its major operation (99%) is oil and gas production and it operates only 1 refinery.

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PetroChina’s First Half Result the Most Disappoining Among Chinese Oil Giants

WTI oil futures open Monday’s trading session firm at $85 a barrel after the weekend saw US crude oil refineries escape any major damage from Hurricane Irene which hit the US East Coast and passed directly over New York early on Sunday.

Latest WTI Oil Price

US Light crude oil futures for October 2011 delivery was trading at $85.66 a barrel, 07.20 GMT this morning in electronic trading on the NYMEX.

Irene Hits East Coast

Tropical Storm Irene packed hurricane force winds when it slammed into the East Coast near North Carolina this weekend and headed north into New York. The storm was blamed for at least 21 deaths, widespread severe flooding and more than 4 million homes and business losing power.

“The greatest impact from the storm is likely to be the impact on regional economic activity caused by flooding and power outages. These could take some time to restore to normal, and is therefore likely to reduce petroleum demand in the interim.” JP Morgan said in a report.

Irene was 20 miles south of St. Johnsbury, Vermont, with winds of 50 miles per hour and moving north to northeast at 26 miles per hour as of a National Hurricane Center update at 8pm New York time.

Seven US oil refineries with a total of 1.2 million barrels per day of oil refining capacity, or 73 percent of the 1.7 million barrels per day total in the US Northeast were in the storm’s projected path.

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WTI oil trading firm at $85, US refineries escape Irene damage

Oil prices moved narrowly with a mildly downward bias. Investors readily ignored the impacts of Hurricane Irene on oil output. According to the US national Hurricane Center, the Category 3 hurricane is expected to strike North Carolina later today. It’s said that the storm is on a ‘worst-case track’ for the East Coast. The DOE/EIA’s data showed that the East Coast has 10 operating oil refineries with a capacity of 1.21M bpd, accounting for 7.1% of US’s operating capacity. While evacuation of staff will disrupt production, investors worried more about demand than supply, especially both Citigroup and UBS downgraded their global economic forecasts.

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In the commodity sector, oil prices strengthened as led by stock markets and decline in crude inventory in the US. The front-month contract for WTI crude oil rose for a third consecutive day to a 3-day high of 86.39 before settling at 85.44, +1.21% while the equivalent Brent crude contract soared above 110 for the first time in 3 days and closed at 109.3, up +0.88%. Gold slumped on profit-taking yesterday after rising to a record high of 1917.9.

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Oil prices gained modestly, in tandem with the advance in stock markets, amid speculations that the Fed will signal stimulus measures later this week. While reports that tensions in Libya are coming to an end have sent Brent crude oil prices lower, losses were pared and the front-month contract ended the day almost flat. Some market participants were less pessimistic than others and expected it would take quite some time for Libya’s oil production capacity to be back to pre-crisis level.

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Oil Rises as It Takes Time for Normalization of Production in Libya