NEWS & EVENTS: Breaking News
22.06.2009 08:30
June 22. In global petroleum market news, oil prices fell 2.5% to below USD 70 a barrel Friday, dragged lower by a sell-off in the gasoline market as dealers bet there would ample fuel supply in the United States to meet demand from summer vacationers. US light, sweet crude fell USD 1.82 to settle at USD 69.55. London Brent crude dipped USD 1.87 to close at USD 69.19 a barrel. In our opinion, the main reason for this drop was gasoline, which is under seige given the huge supply build last week. According to the mid-week Inventory report, US gasoline supplies rose unexpectedly last week as refiners boosted output to prepare for an expected seasonal uptick in demand. For the record, gasoline inventories rose 3.39 mn barrels to 205 mn last week, the biggest increase since January, the Energy Department said on June 17. Total daily demand for fuels is 6 percent lower than a year ago. Gasoline for July delivery fell 10.51 cents, or 5.2%, to end the session at USD 1.9244 a gallon in New York, the lowest settlement since June 3 and the biggest decline since April 20. Futures fell 5.8% last week, the largest drop since February. Experts have been mixed on how strong consumption for the motor fuel will be this summer as the effects of the recession counter-balance relatively low prices at the pumps. Meanwhile, the US Transportation Department said on Friday Americans drove more miles in April than they did a year earlier, marking the first monthly rise in U.S. highway travel in more than a year. Oil prices had been in positive territory earlier on Friday as rebel attacks in Nigeria hit output from the OPEC-member country and economic optimism propelled equities markets higher. The Movement for the Emancipation of the Niger Delta, or MEND, said it blew up an Eni SpA pipeline on Friday that delivers oil to the Brass export terminal. They attacked a Royal Dutch Shell Plc pipeline earlier last week, cutting oil production that supplies the Forcados oil terminal. The lost output totals 33,000 bpd, Eni reported. A company official couldn’t immediately say whether the attack would cause a suspension of delivery obligations. Moving forward, we expect to see disruptions in Iran and Nigeria continue to lend support to prices. This factor should push WTI and Brent above USD 70 this week.
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