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The Commodities Report

Crude oil slightly up after U.S. inventories

Thu, Jan 29 2009, 10:10 GMT
by KBC Market Research Desk

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• Gold slips below 900$/oz level as stock markets gain

• Base metals hover around current prices

Brent and Distillates

Crude was slightly up on Wednesday after a heavy sell-off late Tuesday, with market reaction to the release of the weekly US crude stocks data.

The latest US weekly inventories data showed a substantial rise in crude stocks last week, up 6.2mln.b, well above the forecast for an increase of 2.9 mln.b. Nevertheless, petrol and heating oil showed biggerthan- expected stock declines. Distillate stocks (including heating oil) dropped 1mln.b, more than expected decline of 700kb and gasoline stocks fell 100kb, counter to the consensus forecast for an increase of 1.6mln.b.
U.S. crude product consumption remained weak, with total product demand averaging 19.43mln.b/d over the past four weeks, down 4 % compared with the same period last year.

U.S. refiners are likely to take more processing units down for longer periods during spring maintenance as prolonged economic weakness eases demand for gasoline and diesel fuel.

OPEC Secretary General Abdullah al-Badri told at the World Economic Forum in Davos that even an oil price of 50$/b was too low to encourage investment in new supply and added that the cartel would fully enforce the cca 4.2 mln.b/d supply cut by the end of this month.

Japan's crude oil inventories have fallen after hitting a three-month peak last week, despite a drop in refinery crude runs, suggesting refiners were importing less oil as the global economic crisis erodes demand. Crude stocks in Japan totalled 107.99 mln.b in the week to Jan. 24, down 3.9 % from the previous week, but 7.0% higher than a year ago, weekly data from the Petroleum Association of Japan showed.

Oil firms began restarting operations off western Australia on Wednesday after a cyclone passed through the region and forced the shutdown of production platforms accounting for nearly half of Australia's oil output.

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Published on  Thu, Jan 29 2009, 10:21 GMT

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