Headlines
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Gold still below 940$/oz level
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Copper steady in London
Brent and Distillates
On Wednesday crude prices continue increasing after U.S. government report showed a bigger-thanforecast inventory decline and an increase in fuel demand. Crude oil stockpiles fell 3.87 mln.b to 357.7 mln.b. The drop was more than twice the size forecast by analysts surveyed. Fuel consumption climbed 1.3% to 19 mln.b/d last week, the highest since March. On the contrary gasoline inventories climbed 3.39 mln.b to 205 mln last week, the biggest gain since January.
Crude has climbed to 70$/b in recent days as traders have wagered that the worst of the recession, which has cut sharply into global oil demand, may be past. Unrest in Iran and Nigeria also bolstered prices.
A Nigerian militant group said on Wednesday it had sabotaged a Royal Dutch Shell oil pipeline in the Niger Delta, the latest attack in its war against the military and the oil sector.
China's first fill of its state oil reserve, done secretively over a 30-month period, coincided with much of the market slump in late 2008, and it is now constructing a much larger second phase of storage. The country is executing its plan to build a supply buffer because imports make up half its consumption.
U.S. lawmakers introduced a bill on Wednesday ordering the Energy Department to sell 70 mln.b of light sweet crude oil from the Strategic Petroleum Reserve to restrain rising oil prices. The legislation would require the department to replace the barrels of oil with heavy crude oil, which is cheaper. The process would have to be completed within five years
Japan's refining rate fell further to its lowest in more than six years, data showed on Wednesday, reflecting heavy seasonal maintenance and slumping demand for refined products.
Japanese refiners ran their facilities at an average 63.2% of total capacity of 4.83 mln.b/d in the week to June 13, down 1.2 % from the week before, the Petroleum Association of Japan said.
Venezuelan legislators approved a law to increase the stake government holds in the petrochemicals industry, the latest measure to forge a socialist state. The law approved by the National Assembly, where Chavez supporters hold a majority, calls for joint ventures with a minimum 50 % state control in primary and secondary petrochemical projects.
Mexico's state energy company Pemex is trying to extract what oil it can from its key Cantarell deposit as growing water and natural gas levels in the giant field depress yields of crude. Cantarell produced more than 2 mln.b/d as recently as 2004, but yield has plunged as the aging field enters its natural decline phase, sending Mexican oil production tumbling to its lowest level since the mid-1990s.
Venezuelan oil production ran well over estimates in the first four months of the year, according to government data obtained by Reuters. Output from the country averaged 3.09 mln.b/d from January to April, well over estimates by the U.S. EIA and the International Energy Agency, which peg production closer to 2.1 mln.b/d.
