Headlines
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Higher U.S. gasoline inventories push crude below 70 $/b level
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Gold responds to greenback movement
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Base metals recover with nickel leading the pack
Brent and Distillates
On Wednesday crude experienced a volatile session paring its gains after closely followed weekly U.S. EIA data showed a sharp rise in stocks of petroleum products even if crude inventories fell for the fourth consecutive week. But this was overshadowed by the gains in gasoline, diesel and heating oil. Crude stocks dropped 3.7 mln.b to 350 mln.b while gasoline and distillates inventories rose on stronger imports and weaker demand, with gasoline rising 2.3 mln.b and the distillates by 2.9 mln.b.
Fundamentals are currently determining the direction of crude oil prices but speculators are amplifying those moves, the head of the IEA, Nobuo Tanaka, said on Tuesday.
OPEC oil supply rose in June as higher output from several members of the group offset cutbacks in Nigeria caused by militant attacks. Supply from the 11 members of OPEC countries bound by output targets rose to 26.02 mln.b/d from 25.91 mln.b/d in May, the survey of oil firms, OPEC officials and analysts found. OPEC is unlikely to raise oil output when its minister meet in September as the oil market is still oversupplied, Kuwait's oil minister said on Wednesday.
California gasoline demand fell 5.6 % in the first quarter of 2009 from the same period a year earlier, the California State Board of Equalization said on Tuesday. Diesel consumption was down 11.6 % in the first quarter, the Board of Equalization said.
Iraq launched its first major energy auction since the 2003-led invasion on Tuesday, awarding its largest field to a BP-led group but doling out far fewer contracts than expected due to tough payment terms. Most companies, including firms from China and India eager to get a share of the world's third largest oil reserves, balked at lower-than-expected fees and Iraq failed to strike deals on the remaining seven oil and gas fields on offer.
Iraq faces regulatory, administrative and political barriers that will prevent it from major oil production expansion for at least five years, David Fyfe, the head of the International Energy Agency's Oil Industry and Markets Division, said on Tuesday.
China unexpectedly increased gasoline and diesel prices this week, raising them for the third time since late March to their highest level ever. At nearly 9 and 10 % respectively for gasoline and diesel, the increases are the biggest since a shock rise up to 18 % exactly a year ago -- a move that helped pull oil prices off record highs as traders feared that higher fuel costs could slow demand growth in the world’s secondlargest consumer.
The increases in China's crude oil stocks slowed to 0.4% in May, as hefty oil imports were largely consumed because of refiners' record operational levels. The country imported 4.02 mln.b/d in May, the secondhighest volume on record, but refineries processed a record 7.34 mln.b/d in May, encouraged by higher fuel prices, decent margins and rising sales.
