Crude Oil

[setravis]

Aug. 16, 2011, 3:31 p.m. EDT

Oil ends lower as global demand prospects weaken

SAN FRANCISCO (MarketWatch) — Crude-oil futures fell 1.4% Tuesday, pressured by a stronger U.S. dollar and weaker global demand prospects after the euro zone's economy grew at only a modest pace in the second quarter.

But ongoing risks to global supplies following an oil spill in the North Sea and increasing tension in the Middle East and North Africa, particularly Libya and Syria, offered some support for oil prices.

Crude for September delivery /quotes/zigman/2075827 CL1U -1.05%  shed $1.23 to close at $86.65 a barrel on the New York Mercantile Exchange. Prices gave back most of the $2.50 it gained on Monday, when it logged its highest finish since Aug. 3.

"The oil story is and will remain first and foremost a growth story," said Jason Schenker, president and chief economist at Prestige Economics. "Any hint, suspicion, or confirmation of weaker growth could engender some price weakness."

Data released Tuesday showed that the euro zone's gross domestic product grew 0.2% in the second quarter compared with the preceding three months. The figure was below expectations of 0.3% growth and marks a slowdown from the 0.8% rise seen in the first quarter.

Germany's GDP growth was also at a paltry 0.1% in the April-through-June quarter compared to the preceding quarter. German GDP had expanded 1.3% in the first quarter. Read about Germany's GDP.

German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Paris Tuesday to discuss euro-zone debts. At the meeting, they announced proposals to boost the governance of the euro zone and proposed a new council as part of their commitment to defend the shared currency, according to media reports. Read about the proposals from the meeting.

Partially offsetting the pressure from the grim economic data was a 0.9% rise in U.S. industrial production for July. Read more about U.S. industrial output.

"Growth and demographics are fundamental drivers behind the trend moves higher in price" for oil, said Schenker in emailed comments, "and are not poised to dissipate."

So "the medium- and long-term prospects for crude oil and all commodities remain higher," he said.

The greenback strengthened Tuesday, which tends to discourage investment in dollar-priced commodities such as oil.

The dollar index /quotes/zigman/1652083 DXY +0.09% , which measures the performance of the greenback against a basket of six currencies, stood at 73.998, up from 73.836 late Monday. Read more about currencies.

Finding some support
Oil had posted a 2.9% gain on Monday encouraged by a rise in U.S. stocks and a weaker dollar.

Supply risks are also a growing concern following further actions by opponents of Col. Moammar Gadhafi against his regime in Libya. "It is unlikely we shall see Libya's output restored to at least 1 [million barrels per day] by year end," said Andrey Kryuchenkov, analyst with VTB Capital in London, in a note to clients.

"Markets are also watching the situation in Syria, where the U.S. wants Europe and China to impose sanctions on Syria's oil industry, imperilling about 400,000 barrels of oil a day," according to analysts at MF Global.

Later Tuesday the American Petroleum Institute will deliver its weekly inventories report, followed by the more closely watched U.S. Energy Information Administration report on Wednesday.

Analysts polled by Platts forecast a drop of about 500,000 barrels in U.S. commercial crude stocks for the week ended Aug. 12.

Gasoline inventories are projected to fall by 2.3 million barrels, while middle distillate stocks will show a buildup of 700,000 barrels, according to Platts.

Last week the government's data showed a surprise 5.2 million barrel decrease in crude inventories.

Ahead of the supply data, September heating oil /quotes/zigman/2075596 HO1U -0.06%  closed down 1 cent at $2.93 a gallon, while September gasoline /quotes/zigman/2075611 RB1U -0.66%  fell by 2 cents to $2.85 a gallon.

September natural gas /quotes/zigman/2049443 NG11U -2.14%  suffered the biggest decline among energy futures, down 9 cents to finish at $3.93 per million British thermal units. It closed at its lowest level in over a week.

[setravis]

Iraq oil exports now at 2.2 mln bdp -min

Tue Aug 16, 2011 2:01pm EDT

BAGHDAD Aug 16 (Reuters) - Iraq's oil exports for August currently average 2.2 million barrels per day, Oil Minister Abdul-Karim Luaibi said on Tuesday.

Luaibi said crude exports were expected to be at 2.5 million bpd in 2012, adding that he expected oil revenues to reach over $80 billion by the end of 2011.

[setravis]

Venezuela, Iran seek to boost dialogue within OPEC
Venezuela, Iran seek increased coordination in OPEC as economic woes weigh on oil prices

On Tuesday August 16, 2011, 5:03 pm EDT
CARACAS, Venezuela (AP) -- The presidents of Venezuela and Iran have agreed to work together within OPEC as economic concerns weigh on world oil prices, the Venezuelan government said Tuesday.

President Hugo Chavez spoke with Iranian President Mahmoud Ahmadinejad by telephone Monday, and the two agreed on the need to coordinate more closely in OPEC, Venezuela's Foreign Ministry said. It cited the "ominous effects of the crisis in the dominant powers' economies."

It also said the leaders agreed to instruct their oil ministers to maintain "fluid and constant communication."

Venezuela and Iran have traditionally favored efforts to boost oil prices within the Organization of Petroleum Exporting Countries.

Oil prices declined Tuesday amid concerns about sluggish growth in Germany and economic troubles in Europe. Benchmark West Texas Intermediate crude for September delivery declined $1.23 to finish at $86.65 a barrel on the New York Mercantile Exchange.

Chavez and Ahmadinejad also discussed the conflicts in Libya and Syria. They plan to closely follow the situation in those countries and deepen efforts "to achieve peace," the Foreign Ministry's statement said, without elaborating.

Chavez has put an emphasis on building strong ties with Iran in recent years. He has also been a staunch defender of Libyan leader Moammar Gadhafi.

These are two leaders " Ahmadinejad and Chavez that need to be removed from their government..Permanently !Another couple of thugs

[setravis]

Futures Movers
Aug. 18, 2011, 3:49 p.m. EDT

Oil down 5.9% on growth fears, stocks selloff
Housing, factory activity, and jobs data come in worse than expected

SAN FRANCISCO (MarketWatch) — Crude-oil futures tanked Thursday as fears of a recession flared and macroeconomic reports reinforced concerns about a slowdown in oil demand.

Crude for September delivery /quotes/zigman/2075827 CL1U -1.53%  retreated $5.20, or 5.9%, to settle at $82.38 a barrel on the New York Mercantile Exchange. It had traded as low as $81.86 a barrel.

The settlement price was the largest one-day percentage and dollar decline since Aug. 8, and the lowest finish since Aug. 9.

Oil added to losses after data showed a fall in sales of existing homes and higher consumer prices.

In addition, a gauge of manufacturing activity in the Philadelphia area weakened to its lowest level in more than two years. Earlier, a weekly jobless claims report had pointed to a still ailing job market.

"It's a demand story," said Kyle Cooper, a managing director of IAF Advisors in Houston. "Typically we'd be close to peak demand time, and demand is just not very good."

Lower stock prices and the overwhelmingly negative macroeconomic data points added to the worries about demand, he said.

Oil has declined 14% so far this month and 10% for the year as concerns about the euro zone's sovereign-debt crisis and the U.S.'s anemic recovery keep investors worried demand for oil will be weak for some time to come.

Jobless claims rose back to the 400,000 level, according to a Labor Department report on Thursday. Read more about jobless claims.

Initial jobless claims in the week ending Aug. 13 rose 9,000 to 408,000, according to the Labor Department. The increase was larger than analysts had expected, with the consensus forecast around a rise to 400,000.

The Philadelphia Federal Reserve Bank's business outlook survey fell to negative 30.7 in August from 3.2 in July -- the lowest reading since March 2009. See more about the Philly Fed report.

The cost of living in the U.S. climbed in July, mostly thanks to energy prices, as the consumer price index rose 0.5%, its biggest gain since March. Read more about inflation.

Sales of existing homes fell 3.5% in July to an eight-month low. See more about existing-home sales.

Oil had tracked stocks on Wednesday, rising 1.1% and looking past a surprise increase in inventories reported by the Energy Information Administration.

Supplies rose by 4.2 million barrels against expectations of a draw of 500,000 barrels. Read more about Wednesday's action in oil futures.

The EIA inventory data was bullish on gasoline, with stocks sliding 3.5 million barrels.

Rather than a sign of improving demand, however, "the drawdown stems from low imports of below 700,000 (barrels a day) while U.S. refiners are hiking distillate yields, with four-week average diesel output recently hitting all-time highs," analysts at JBC Energy wrote in a note to clients Thursday.

September gasoline /quotes/zigman/2075611 RB1U -0.43%  declined 9 cents, or 3%, to $2.78 a gallon. September heating oil /quotes/zigman/2075596 HO1U -0.47%  was off 9 cents, or 2.9%, to $2.87 a gallon.

Natural-gas futures retreated after the weekly government inventory report showed a larger-than-expected increase in supplies.

Natural gas for September delivery /quotes/zigman/2049443 NG11U +1.18%  declined 4 cents, or 1%, to $3.89 per million British thermal units.

The Energy Information Administration said Thursday that supplies of natural gas rose 50 billion cubic feet in the week ended Aug. 12.

Analysts surveyed by Platts had expected an increase between 45 billion cubic feet and 49 bcf for the week.

[setravis]

Oil finishes lower for the week
Oil ends the week lower, pointing to lower gas pump prices down the road

Friday August 19, 2011, 4:42 pm EDT
Oil ended the day below $83 a barrel on Friday, finishing down about 4 percent for the week, on fears that another recession could cut demand for energy.

Benchmark West Texas Intermediate crude for September delivery fell 12 cents to finish at $82.26 per barrel on the New York Mercantile Exchange after earlier rising as high as $83.55 per barrel. Stocks also started the day with gains but the major indexes ended down more than 1 percent, posting their fourth straight week of losses as uncertainty about the global economy continued.

Benchmark crude remains well above its lowest point in the past year. It finished at $71.63 a barrel last Aug. 24.

Still, oil has been falling since April and lower prices will likely mean more relief at the gas pump. The national average for retail gasoline is $3.59 a gallon, according to AAA, Wright Express and Oil Price Information Service. That's down 10 percent from this year's high of $3.98 on May 5.

Gas could be around $3.25 a gallon by Labor Day and may drop as low as $3.15 by the end of the year, according to Fred Rozell, OPIS retail pricing director.

While gas may be headed lower, it's still taking a big piece out of household income. The median U.S. household income before taxes is almost $50,000 a year. In July families spent about $374 a month on gasoline, or around 9 percent of household income, according to Rozell. For the year, monthly gas expenses average about 8.4 percent, compared with 6.7 percent in 2010.

Crude got some support Friday from a weaker dollar, which hit a new post-World War II low against the Japanese yen. Oil and other commodities are priced in dollars, so a weaker dollar makes them cheaper for traders who use other currencies. Oil lost some ground by the end of the day as the dollar got a little stronger.

In other Nymex trading for September contracts, heating oil rose 2.97 cents to finish at $2.9045 per gallon and gasoline futures added 5.08 cents to end at $2.8412 per gallon. Natural gas rose 4.8 cents to finish at $3.940 per 1,000 cubic feet.

In London, Brent crude rose $1.63 to end the day at $108.62 per barrel on the ICE Futures exchange.

[setravis]

Oil: What I Would Do if I were President...
September 24, 2011


In 2007, the House of Representatives passed a $16 billion increase in taxes on oil companies. Actually, this is a lie. Oil companies, like every company in America, see taxes as the cost of doing business. Any tax increase will be passed onto consumers. If the voting public supports this increase, then they have only voted for a tax increase on themselves.

The profits oil companies make go to pay millions of share holders. Additionally, the money brought in from the sale of gasoline and other petroleum products is used to locate, transport, refine, and distribute. The oil industry employs tens of thousands of people, creates related support businesses, takes all the risks in drilling and transportation, pays billions of dollars in taxes, and gets blamed for gouging the consumer for unfair "profits" for delivering a volatile product safely to outlets of distribution a few miles from our homes and next to highways that criss-cross America. Government agencies, on the other hand, simply cash the checks for the taxes the gas stations collect from their customers.

The combined state and federal taxes for California is over 50 cents per gallon. The United States average is somewhere around 45 cents per gallon. With the bridge collapse in Minneapolis, you're going to hear about taxing the oil companies even more. Here's a question: Where have all the taxes gone that we've been paying every time we put gasoline in our cars? Our politicians have been spending these billions of dollars on their own pet projects to keep them in office and grow the government.

Politicians don't want to talk about high gasoline taxes. In fact, revelations of high taxes on gasoline might anger the American public and produce sympathy for "big oil." It would expose the fraud of "price gouging" by the oil companies. I'm hopeful if prices remain high that more people will start talking about how state and federal governments are the real problem. Maybe even some in the mainstream media will start asking lawmakers why oil profits of about ten cents per gallon are "obscene" but nearly 50 cents per gallon of taxes is . . . patriotic?


As a national security issue, as president I would declare a state of emergency and immediately enact the following:

Oil is the lifeblood of this economy. As a nation, we are too dependent on foreign sources for oil. As you know, the oil we need — 11 million barrels a day — is located in the most hostile region in the world. While we consider a nuclear attack to be a possibility, our enemies could do far more damage by destroying the majority of oil fields in Saudi Arabia. Any disruption in the flow of oil could bring our nation to a standstill, not just economically but militarily. We would find it almost impossible to defend ourselves against domestic and foreign aggressors if gasoline supplies were jeopardized. As a result, I am issuing an Executive Order that will open up all lands and sea rights in the possession of the United States to oil exploration.

In addition, I am temporarily suspending stringent environmental laws that make it nearly impossible to build and bring online new refineries. I am proposing that ten new refineries be built and running within eight years. Five of these refineries will be designed in such as way to be impervious to a military attack. The goal is to have at least a three-year supply of crude oil stored in the United States to take care of domestic and military needs as if the real possibility exists of being completely cut off from our present foreign sources. We need a Manhattan project for oil independency.

If there is a presidential candidate you are supporting, I would suggest proposing that he adopt such a policy.

[setravis]

Crude Oil

Nymex WTI light crude is in a primary up-trend, with the current retracement likely to find support around $100/barrel. Rising Nymex crude prices reflect a stronger US economy. Expect the spread with Brent crude to narrow. Target for the current Nymex advance is the 2012 high of $110/barrel*.