Headlines
- Gold hovers slightly above 800$/oz
Brent and Distillates
Crude lost further momentum Tuesday as the U.S. dollar continued to recover and equities markets in Asia and Europe drift. However, on Wednesday crude prices changed direction and rose following the latest U.S DoE weekly inventories data.
According to DoE report U.S. crude stocks rose 1.7mln.b, slightly below the consensus forecast for a rise of 1.9mln.b. Nevertheless, stocks standing at their highest level since July 1993 were offset by a fall of 900 kb at Cushing, Oklahoma, the delivery point for WTI. U.S. distillate stocks dropped 3.4 mln.b, well above the consensus forecast for a fall of 200 kb. Petrol stocks rose 600 kb, confounding the consensus forecast for a 1mln.b decline.
U.S. crude oil refining outages will be higher than normal in April, but will fall below average for rest of the second quarter, EIA said on Wednesday. Some 767kb/d per day of U.S. oil refining capacity will be shut down in April, more than the 670 kbpd typically shut during the month.
Nigeria is unlikely to cut its crude oil production much further, even though it is exceeding its OPEC target, because the country's weakening economy is overwhelmingly reliant on oil revenues. Nigeria is expected to export 1.81 mln.b/d in May, according to trade sources, far above its implied production target of 1.67 mln.b/d set by OPEC.
Algerian oil minister Chakib Khelil said late Tuesday that oil prices could recover to 70$/b by the end of 2009 or in early 2010 and could even go up to 80$/b on signs that the economic recovery was under way, particularly in the U.S. As for compliance OPEC members with cuts totaling 4.2 mln.b/d agreed last year are at 80% and should move higher by the time OPEC ministers meet again in Vienna on May 28, Khelil said.
Japan's crude inventories rose last week for a second straight week, hitting their highest level in over a month. Crude stocks in Japan totalled 103.3 mln.b in the week ended April 4, edging up 0.2 % from the previous week and more than 9 % higher than a year earlier.
Iran is storing 7.7 mln.b of gasoline on ships as part of efforts to secure supplies ahead of its presidential election in June, industry sources said.
Iraq's government on Wednesday invited Brazil's state-run oil company Petrobras to build an oil refinery with a daily capacity of up to 200,000 barrels in the Middle Eastern country.
