NEWS & EVENTS: Breaking News
25.06.2009 08:20
June 25. In global petroleum market headlines, oil fell towards USD 68 a barrel on Thursday, after US fuel inventories rose by more than expected and the dollar held steady, as concerns over the health of the world economy persisted. US light, sweet crude for August fell 57 cents to settle at USD 68.67. London Brent crude lost 8 cents to USD 68.25 a barrel. Gasoline stocks in the world's top consumer rose 3.9 mn barrels last week, far overshooting the consensus forecast, as refiners prepared for the peak driving season, which is expected to be less robust this year, while distillates hit 10-year highs. However, the price drop was capped by the sharp 3.8 mn barrel decline in US crude stocks. All in all, we believe the EIA report, which showed a large increase in products stocks, was a negative factor for oil prices. The big build in gasoline stocks contrasted with industry projections that US travel over the July 4 Independence Day holiday weekend will drop almost 2% this year compared to 2008. We see key resistance around USD 73, the near eight-month high hit on June 11, while we think support will hover at the low USD 60s over the next month. The US dollar held on to most of its gains made after the Federal Reserve signaled it was making no change to its steps to support the economy, but it began to lose its hold slightly as Asian share markets opened positively. Optimism over a potential recovery lifting oil demand has raised prices from below USD 40 over the past three months, although fears about the global economy have resurfaced and the Fed said the climate would stay weak for some time in the United States. And government forecasters said that even though US oil demand should rebound when the economy recovers, crude oil imports might not resume growth as quickly as they did when past recessions ended because of new domestic oil production coming on stream. In addition, investor sentiment was bolstered by an unexpected rise in durable goods orders in May. Orders for big-ticket manufactured items rose 1.8 percent last month, the Commerce Department said Wednesday. In other industry news, multiple militant attacks on pipelines and oil installations in OPEC member Nigeria recently have forced production stoppages, and offered some support to prices, though we believe such regular disruptions have largely been factored in by the market. Moving forward, we expect prices to hover in the USD 65-70 price range until some more positive signs of recovery or new market drivers arise.
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