Headlines
-
Unexpectedly large declines in petrol and heating oil stocks send crude price higher.
-
Gold corrects previous gains
-
Sufficient supplies eases copper price
Brent and Distillates
Crude oil prices rose on Wednesday after the latest U.S. inventories data showed unexpectedly large declines in petrol and heating oil stocks and Chinese imports jumped in February, boosting evidence that its economies will lead global demand back into growth this year.
This morning oil corrects prices from an eight-week high a day ago on expectations that OPEC members would keep pumping crude above quotas in the second quarter.
U.S. crude stocks rose 1.4mln.b last week, below the consensus market forecast for an increase of 1.9mln.b. Petrol inventories fell 2.9mln.b, confounding the consensus forecast for an increase of 200 kb. Distillate stocks, including heating oil, fell for a sixth week, but the fall of 2.2mln.b was well above the consensus forecast for a drop of 900kb, following recent heavy snow in north-eastern America.
China's imports of crude oil in February picked up pace from a month earlier to the second highest on record on a daily basis, as the economy showed signs of sustained growth momentum.
China bought 4.83 mln.b/d of crude oil from abroad in February, the General Administration of Customs said on Wednesday.
China has started work on its second phase of state strategic oil reserves in the southern province of Guangdong, head of Guangdong Development and Reform Commission, announced. Beijing has started construction works for the second phase of state oil reserves in north-western Xinjiang and Gansu province since late last year.
Analysts at the Centre for Global Energy Studies cautioned that crude oil prices above the $80-a-barrel mark were “not sustainable” as evidence of an improvement in the market’s fundamentals was still lacking. The CGES noted that data on tanker shipments from mid-February onwards suggested that Asian buyers might be trimming their crude imports while refineries elsewhere in the developed world were entering maintenance periods.
On the contrary to CGES OPEC expects that world oil demand is projected to grow by 900 kb/d in 2010, revising up its previous month's forecast while cautioning that the increase is hinged on a sustained global economic rebound, particularly in the U.S. OPEC said in its report that its production climbed to 29.36 mln.b/d last month, an increase of 192 kb/d over January levels with the biggest gains coming from Angola, Venezuela and Iraq—which is not bound by the quotas.
Nevertheless, OPEC's projections offer a more conservative take on global demand growth than those of the U.S. Energy Information Administration. On Tuesday EIA forecasts demand would climb 1.5 mln.b/d, i.e. 300kb/d more than its February estimates.
The global economic recovery will push world oil demand sharply higher in 2010, the U.S. Energy Information Administration said on Tuesday as it increased its demand growth forecast for a second consecutive month. The U.S. agency increased its estimate for world petroleum demand growth this year by 270kb/d to 1.5 mln.b/d, pushing global fuel use to an average 85.51 mln.b/d.
Brazilian state-run oil firm Petrobras will invest 44 bln.$ this year as it seeks to tap deep-sea offshore crude reserves that could turn Brazil into a major energy exporter. The company has not yet released an updated five-year business plan because it is waiting for the approval of a government capitalization plan that could bring in tens of billions of dollars in new funding.
