Author: SondraHunter

WTI oil prices lost another 1.1 percent in trading Wednesday afternoon, heading back to $96 a barrel after a report showing that output from members of the OPEC rose to 31.26 million barrels a day in April, topping a revised March production figure of 30.85 million barrels a day.

Latest WTI Oil Price

US Light crude oil futures for June 2012 delivery was trading at $96.27 a barrel, 17.17 GMT today in trading on the NYMEX.

US Oil Inventories Rise

A weekly report from the US API (American Petroleum Institute) yesterday showed that US crude oil stockpiles rose by 7.78 million barrels to 378.2 million last week, however oil futures pared some losses after government data showed a bigger than expected drop in US fuel stockpiles.

But actual US crude oil inventories, however, rose 3.7 million barrels. Analysts had expected a smaller build of 2 million barrels.

Oil inventories remain at their highest level since 1990, amid weak demand and steadily rising production. Meanwhile, inventories at the US oil hub of Cushing, Okla., rose 1.1 million barrels to a record 44.1 million barrels, the EIA said on Wednesday afternoon.

“We’ve gotten build after build after build after build” in inventories, said Rich Ilczyszyn, chief market strategist at iiTrader in Chicago. “We know demand is waning a bit. We know that China is not firing on all cylinders.”

WTI oil prices remained firmly lower, extending the steepest sell off in crude this year. The last time NYMEX crude fell six sessions in a row was way back in January 2011 and prices could well fall further still.

“With oil price momentum heavily skewed to the downside, we look for the market to be highly sensitive to any crude stock builds larger than 3 million barrels.” US consulting oil firm Ritterbusch & Associates said in a note.

Originally posted here: 
WTI oil price heads back to $96 a barrel as OPEC output rises

Financial markets slumped amid European sovereign debt crisis concerns. The newly elected Greek government has to decide whether, and how, to repay interests of bonds due on May 15. Gold tumbled, inline with the euro, amid worries of Greek default. The benchmark comex contract of the yellow metal plunged to a 4-month low of 1595.5 before ending the day at 1604.5, down -2.11%. Prices remained under pressure in Asian trading Wednesday.

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Gold Tumbles as Euro Declines on Greece’s Default Worries

While the market has not recovered from the disappointing US job data, concerns about the sovereign debt crisis in the Eurozone exacerbated the sentiment as the Socialist party won the French election while exit poll of the Greek election suggested that supports for both pro- and anti-bailout parties are similar. As the new governments of both European countries are likely to opt for less austerity, the outlook to resolve the sovereign debt problems in the region has turned more difficult.

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Eurozone Debt Worries Exacerbated by Election Results

Commodity prices declined as US and European macroeconomic data disappointed the market. Employment data in both sides of the Atlantic came in weaker than expected. The front-month contract for WTI crude oil price fell to 105.22, down -0.89% while the equivalent Brent crude contract slumped to a 5-day low of 117.64 before settling at 118.2, down -1.22%. Gold dropped for a second consecutive day to 1654.0, down -0.51%.

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Disappointing US and EZ Data Sent Commodities Lower

Market sentiment remained firm as the Fed delivered a more optimistic economic outlook but maintain that further easing is still possible should the environment warrant. Wall Street climbed with the DJIA and the S&P 500 indices gaining +0.69% and +1.36% respectively. Crude oil also firmed despite a bigger-than-expected increase in US crude inventory. This was probably offset by the declines in gasoline and distillate stockpiles.

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Sentiment Improves Further as Fed Does Not Rule Out Further Easing

Market sentiment was lifted modestly in the absence of very negative news. In the stock market, Wall Street advanced with the DJIA and the S&P 500 indices rose +0.58% and +0.37% respectively. In the commodity sector, crude oil gained although consolidation continued. The focus today is the FOMC meeting as the press conference will be held and the latest Fed official economic forecasts will be released.

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Sentiment Lifted ahead of FOMC Meeting

The price of an ounce of gold edged higher on Wednesday after a successful Spanish debt auction eased fears about the euro zone debt crisis, but gains were capped as the euro currency remained under pressure ahead of a longer term debt sale in Madrid later this week.

Latest Gold Prices

Spot gold inched up 0.2 percent to $1,652.84 per ounce by 0626 GMT, after touching a one week low near $1,634 in the previous session. US gold gained 0.2 percent to $1,654.30.

The most actively traded contract, for June delivery, gained $1.40, or 0.1 percent, to settle at $1,651.10 per ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Euro Concerns

“The nervousness around the euro zone has eased a bit, which could help stabilise the euro and support gold prices,” said Shanghai CIFCO Futures analyst Li Ning.

But Li added that market sentiment remained cautious ahead of a policy meeting by the US Fed next week, after comments from the Fed over recent weeks have caused sharp price fluctuations.

Adding to the cautious tone were lingering concerns about Spain’s finances. Although Spain managed to exceed the target at Tuesday’s debt auction, it was forced to pay a stiff premium compared with a month earlier, boding ill for a key long term debt sale on Thursday.

“One side of the coin is that equities continue to perform very well, which at one point could weigh on gold. The other side of the coin is that the European debt crisis continues to deteriorate and that should be supportive of gold. So we have a bit of a status quo,” said Graham Leighton, director of precious metals at Newedge.

Weaker US Dollar and Gold Prices

A weaker US dollar, which eased against a basket of international currencies, also fanned interest in gold futures. Gold is priced in dollars and seems cheaper to investors who hold other currencies when the dollar softens. The ICE US Dollar Index was recently down 0.1 percent at 79.474.

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Price of gold edges higher but stays near $1650 as a weaker euro weighs

WTI oil futures open Wednesday’s trading session back at $104 a barrel amid the latest report showed US crude supplies jumped more than expected for a fourth week, suggesting that crude oil demand in America remains weak.

Latest WTI Oil Price

US Light crude oil futures for May 2012 delivery was trading at $104.23 a barrel, 08.01 GMT today in electronic trading on the NYMEX.

Weekly US API Figures

The US API (American Petroleum Institute) said late Tuesday that US crude oil inventories rose 3.4 million barrels last week while analysts surveyed had predicted an increase of 400,000 barrels.

Inventories of gasoline fell 2.6 million barrels last week while distillates tumbled 2.4 million barrels, the API said. The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.

“We look for a sizable US crude supply surplus during the coming months to take some steam out of crude strength. We still see fresh lows to below the $100 mark by next week.” energy trader and consultant Ritterbusch and Associates said in a report.

Seaway Pipeline Reversal

US WTI crude futures settled up 1.2 percent yesterday as investors looked to a coming pipeline reversal that is expected to bring US oil in line with global prices.

The Seaway pipeline reversal, designed to help ease a supply glut in Cushing, Okla., that has been depressing US oil prices, will begin delivering crude to the Gulf Coast refinery belt in a month, or two weeks earlier than expected.

Traders said the move will unlock the value of the landlocked US benchmark, by making the crude available to Gulf Coast refineries. At the same time, the move cuts the value of the European benchmark, Brent crude, as competitive crudes become more plentiful in the region.

“This is all about Seaway. People are buying WTI and selling Brent.” said Tom Bentz, director at BNP Paribas Prime Brokerage, referring to WTI crude, the oil most often delivered against the NYMEX contract.

Continued here:
WTI oil price trading at $104 a barrel amid higher weekly US oil inventories

European shares opened lower Tuesday despite stronger than expected Germany trade data, signaling concerns over US’ job market. Moreover, investors worried that Spain would be the next countries in the Eurozone that would need bailout. In the commodity sector, trading remained quiet with crude oil showing modest downside risks amid concerns on oversupply.

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