Headlines
- Ben Bernanke’s testimony eases gold and supports base metals
Brent and Distillates
Crude oil gained on Wednesday after the latest U.S. weekly inventories showed a rise of 700 kb in crude stocks only, just half the consensus forecast for a rise of 1.4mln.b. At the same time stocks at Cushing, Oklahoma, the delivery point for WTI, dropped 400 kb to 34.5 mln.b. Gasoline stocks dropped 3.4 mln.b, i.e. much more than the consensus forecast for a fall of 100 kb only. On the contrary distillate stocks rose by 800 kb last week, confounding the consensus forecast for a drop of 1.3mln.b.
Executives from major oil companies told Congress on Wednesday that more offshore areas should be opened to drilling to boost domestic energy supplies and reduce America's reliance on petroleum imports after both congressional and presidential bans on expanding offshore drilling expired last year.
Japan's crude oil inventories rose for the first time in five weeks last week, as the refinery utilisation rate fell from a six-month high, suggesting weak oil product demand is leading refiners to cut production. Crude stocks in Japan grew 6.7 % to 108.3 mln.b in the week to Feb. 21 from the previous week, when inventories were near a five-month low, the Petroleum Association of Japan said on Wednesday.
European euphoria over biofuel has ended after slumping oil prices and cheap imports battered the sector last year, while the credit crisis has made the outlook even gloomier. Producers say the fall in oil prices at a far quicker pace than agricultural costs has endangered the sector by slashing margins, although conditions differ among countries depending on the amount and means of government aid.
The Iraqi government said on Wednesday it was willing to increase crude supplies to Asia, including South Korea as the pricing in Asia seems to be very good. Ahmed A. Al-Shamma, deputy minister for refining and gas processing, told reporters during his visit to a shipyard in South Korea.
The value of Russia's Urals crude oil against benchmark dated Brent hit a seven-year high earlier this month and is expected to remain supported as OPEC supply curbs reduce output of competing crude. Besides lower supply of sour crudes from OPEC, arbitrage openings outside Europe and higher official selling prices from Saudi Arabia and other exporters have boosted the value of Russia's main crude export blend.
It will take nearly a year for Iraq to claw oil production back to a post-war high hit last May and Baghdad aims to rely on its own manpower. Pressure problems at two southern oilfields are the main reason for a decline of 250 kb/d. That, on top of oil's 100 $/b price collapse since July last year, has already forced Iraq to cut its budget twice.
China discovered 1.34 mld.t of proven oil reserves and 647.2 mld.m3 of natural gas in 2008, the National Bureau of Statistics said.
