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The Commodities Report

Gold hovers below 950$/oz

Thu, Aug 27 2009, 10:32 GMT
by KBC Market Research Desk

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Headlines

• Crude oil prices extend losses

• Gold hovers below 950$/oz

• Base metals lower across the board

Brent and Distillates

Crude oil prices extended losses on Wednesday after U.S. Department of Energy showed an unexpected build up in inventories. The country’s oil stocks rose last week by 200 kb, confounding analysts’ expectations for a 1.1mln.b drop. The increase came after oil imports jumped to 9.2mln.b/d, up 1.1mln. b/d from previous week’s figures. Also diesel and heating oil stocks rose by 800 kb, above analysts’ forecast of a modest 300 kb rise only. On the contrary gasoline stocks fell by 1.7mln.b, versus expectations for a 1mln.b fall.

Venezuela's Oil Minister Rafael Ramirez said that world oil inventories are too high adding that he did not expect OPEC to raise output at its meeting next month. Ramirez also told that oil could reach an average of 70 $/b by year-end if "current conditions hold," and could go as high as an average 75 $/b in the last three months of the year.

Also Nigeria would like to see oil prices remain at between 70-80$/b and will not push for production changes when OPEC next meets to consider oil output policy on Sept. 9, its oil minister said on Wednesday. The minister said Nigeria was pumping around 1.7 mln.b/d of oil, up from just 1.2 mln.b/d at the height of violence in the Niger Delta, and that it was therefore meeting its OPEC quota.

Australia has given U.S. oil major Chevron Corp a green light for its 42 bln.$ Gorgon liquefied natural gas (LNG) project, the country's largest-ever resources development.

Russian oil output this year will not be less than that of 2008, the head of the country's pipeline monopoly Transneft said on Tuesday,

Japan's crude oil imports dropped (12.7 % from a year earlier) for the ninth straight month in July but the rate of decline slowed from June's steep fall, suggesting energy demand could be starting to stabilise as the economy emerges from recession.

Mexican oil production will fall next year to 2.5 mln.b/d as the country's large but aging Cantarell field declines, state oil monopoly Pemex said on Wednesday.

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Published on  Thu, Aug 27 2009, 10:55 GMT

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