NEWS & EVENTS: Breaking News
24.06.2009 08:31
June 24. In global petroleum market headlines, oil rose nearly 2% Tuesday as the dollar weakened and disruptions from OPEC member Nigeria stoked supply concerns. US light, sweet for August settled up USD 1.74 at USD 69.24 a barrel. London Brent crude gained USD 1.82 to settle at USD 68.80 a barrel. The US dollar fell against the euro on speculation the US Federal Reserve may lower expectations of an interest rate rise when it wraps up its meeting today. Aside from the weaker dollar, oil was also propped up by supply disruptions in Nigeria and the turmoil in Iran. Italian oil company ENI declared force majeure on shipments of Brass River crude oil from Nigeria. Persistent militant attacks over the past three years have cut oil output in the OPEC member, the world's eighth biggest crude oil exporter, to less than two thirds of its installed capacity of 3 mn bpd. Royal Dutch Shell said it was still checking its oil operations in Nigeria's Niger Delta after militants claimed they had launched three attacks against its facilities at the weekend. Nigerian security forces arrested nine gunmen suspected of being involved in last week's pipeline attack that forced Agip to halt some oil output in the Niger Delta. Economic optimism has helped lift crude prices from below USD 40 a barrel in February to above USD 70 earlier this month. The chief economist for the International Energy Agency warned that any strong price rise could clip a rebound in the global economy. Kuwait's oil ministers said OPEC will not cut oil output at its meeting in September, after the producer group last year agreed to a series of output cuts to help lift prices. "Nobody expected the price to reach USD 70 a barrel so quickly," Kuwait's Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters in parliament, adding that OPEC would likely call for greater compliance with current output targets. We believe that the cartel’s avowed goal of achieving USD 75-USD 80 by the end of the year sounds quite realistic. OPEC's president had previously said the cartel wants an oil price of USD 75 a barrel by the end of the year. Iranian authorities said they would teach an exemplary lesson to "rioters" held in the worst unrest since the birth of the Islamic Republic and accused Western powers of inciting the violence. US President Barack Obama strongly condemned the OPEC country's crackdown on the anti-government protesters, who have taken to the streets following disputed elections earlier this month. Moving forward, according to our revised forecast, we believe that today’s US inventory data will show that crude stocks in the world's top consumer showed a drawdown of some 1.2 mn barrels last week on lower imports, while we expect to see a build in gasoline and distillates stocks. Yesterday’s inventory data from the American Petroleum Institute showed that gasoline supplies increased 3.7 mn barrels last week. Exports from Japan, the world’s third-largest oil consumer, accelerated a decline in May, casting doubt on the economy’s growth prospects. The API data showed a sharp rise in US gasoline inventories, an increase in product inventories and only a very small movement in crude inventories, which pushed down crude oil for August delivery fell as much as USD 1.18 to USD 68.06 a barrel in after-hours electronic trading on NYMEX.
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