Headlines
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Crude oil continues climbing towards 80 $/b level
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Gold near its record level
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Higher equities support base metals demand
Brent and Distillates
On Monday oil prices experienced further upward pressure and got near to 80$/b because of heavy trading in options contracts ahead of the year end. A large number of call options – contracts giving holders the right to buy crude oil at a predetermined price – have been struck above 80$.oil
However, some analysts are sceptical to further crude rally as in the U.S. stockpiles of middle distillates (which, alongside diesel, includes heating oil) are at their highest in decades. Europe faces a surplus of distillates so great that traders are booking tankers to store it offshore after running out of inland deposits. Also the IEA says the volume of refined oil products in floating storage offshore Europe rose 25% in September. In Asia, diesel stocks are rising fast, with inventories in the Singapore hub trebling since August to a record.
Norwegian StatoilHydro has become the top lifter of Oman crude off the Dubai Mercantile Exchange (DME), taking deliveries up to 4 mln.b in October and November. At the same time, China's Unipec, the biggest buyer of Oman in total via term contracts, the spot market and off the DME, is now an important seller on the exchange.
Brazil's state-run oil company Petrobras will begin drilling in November near the giant Tupi field in offshore shore areas owned by the government. The exploration is the first step in a proposed Petrobras capitalization plan in which the government would give it drilling rights to offshore acreage in exchange for new shares, effectively giving the company more resources for its offshore exploration push.
China's auto fuel exports will stay high in October and November, helped by refineries running near 90 percent capacity, as winter diesel demand slowly emerges but Asia's gasoline market has slowed,
Combined stocks of gasoline, diesel and kerosene held by China's top two oil companies edged down 0.2% in September over August, despite a 0.5% drop in domestic sales, an industry official told Reuters on Monday. The small drop in refined fuel inventories was the second straight month of declines after three months of consecutive stock builds. Stocks stood at about 12.5 mln.t at the end of September, almost unchanged from August.
India imported an estimated 2.64 mln.b/d of crude in August, emerging out of a trough in June and July. The August figure was up 11.43% from July and 7.1% higher than imports in the corresponding period of 2008.
