Headlines
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Higher U.S. inventories return crude below 70 $/b
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Stronger greenback eases precious and base metals
Brent and Distillates
Crude oil dropped on Wednesday in reaction to the latest U.S. inventories data. The latest data showed U.S. crude stocks were up 2.8 mln.b last week, confounding the consensus forecast for a drop of 1.5mln.b. However, the increase in crude stocks was due partly to a rise in imports together with lower refinery utilisation.
Also petrol inventories jumped 5.4 mln.b far above the consensus forecast for an increase of 400 kb. Distillate stocks rose for a fifth consecutive week, up 3 mln.b, more than double the consensus forecast for a rise of 1.4 mln.b.
OPEC does not need to cut output next year, according to the latest figures on supply and demand, the Saudi Arabia oil minister told on Tuesday. Demand for Saudi crude was increasing, and this was evidence the world's economy was recovering from recession, Ali al- Naimi said in a wide-ranging interview.
France's Total and Venezuela will invest 25 bln.$ to develop an oil field in the Orinoco region, part of the OPEC member's plan to greatly increase output in a decade with the help of foreign investors. Venezuela has recently announced 61 bln.$ investments in recent weeks to develop its vast crude reserves, with large projects being assigned to China and Russia.
President Hugo Chavez this month said Venezuela and Spanish Repsol had found a 7 trillion to 9 trillion cubic feet offshore field that would help make Venezuela a global natural gas "giant".
Chinese state companies this month began supplying petrol to Iran and now provide up to one-third of its imports in a development that threatens to undermine US-led efforts to shut off the supply of fuel on which its economy depends. Iran usually imports 120kb/d. Beijing’s oil companies Sinopec and CNPC have also signed 4 bln.$ contracts to help Tehran to pump more oil out of its fields, many of which are declining with age.
BP has failed to carry out promised safety improvements after an explosion that killed 15 workers at its refinery in Texas in 2005, the U.S. Occupational Safety and Health Administration said in letter sent to the company. The complaint by the federal regulator is bad news for BP, which has already spent more than 2 bln.$ in the wake of the blast settling lawsuits and criminal charges and seen its reputation in the U.S. tarnished.
