Bloomberg:Crude Rises to Three-Week High as Dollar Weakens By Moming Zhou - Jun 12, 2013 West Texas Intermediate crude rose to a three-week high as the dollar weakened against its major peers amid concern that Middle East tension may reduce supplies. Oil gained as much as 1.1 percent as the Dollar Index fell 0.3 percent, reversing an earlier gain. Turkish protesters urged people to return to Taksim Square this evening, after they were driven out by police last night. Libya’s National Oil Corp. said yesterday crude output has fallen to less than 1 million barrels a day after sabotage and labor unrest shut oilfields and ports. “The dollar is down and we are getting some support from that,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “There is a continuing focus on the Middle East, whether it’s Turkey or Libya’s production.” WTI for July delivery rose 68 cents, or 0.7 percent, to $96.06 a barrel at 12:37 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 4.6 percent below the 100-day average for the time of day. Brent for July settlement rose 80 cents, or 0.8 percent, to $103.76 a barrel on the London-based ICE Futures Europe exchange. Volume was 0.8 percent below the 100-day average for the time of day. Dollar Drops The Dollar Index, which measures the greenback against six other major currencies including the euro, dropped 0.4 percent at 12:37 p.m. A weaker dollar boosts oil’s appeal as an investment alternative. The dollar fell before U.S. economic data that may provide more direction about when the Federal Reserve will begin to taper its monetary stimulus. “The dollar is going negative, so it’s positive for the oil market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We are watching the broader financial market.” Turkey’s Taksim Solidarity group, which says it represents protesters, called in an e-mailed statement for people to return to the square. It reiterated demands including the preservation of the park, the dismissal of governors and police chiefs in cities where demonstrators have been attacked, and the release of those detained during the rallies. The protests, which spread nationwide after May 31, are the biggest in more than 10 years under Prime Minister Recep Tayyip Erdogan, and sent Turkish markets plunging. Ceyhan Terminal The Turkish Mediterranean port of Ceyhan is the export terminal for crude that’s transmitted via pipeline from northern Iraq, OPEC’s second-largest producer. It also receives Azeri Light crude from Baku, in the Azeri section of the Caspian Sea, via Georgia, through the 1,100-mile (1,768-kilometer) Baku-Tbilisi-Ceyhan pipeline. Farther west, an estimated 2.9 million barrels a day of oil flowed through the Turkish Straits in 2010, according to the Energy Information Administration, which designates them as “one of the busiest and most dangerous choke points in the world supplying Western and Southern Europe.” The straits, including two narrow waterways of the Bosporus and the Dardanelles, connect the Sea of Marmara with the Black Sea on one side and the Aegean arm of the Mediterranean Sea on the other. They are also considered the boundary between the continents of Europe and Asia. Libyan Output Libya’s output has plunged by at least 600,000 barrels a day from more than 1.6 million in the middle of last year, state-run NOC said in a statement on its website. That would bring pumping to the lowest level since January 2012, when the nation’s oil industry was rebuilding after the fall of deposed leader Muammar Qaddafi the previous year, data compiled by Bloomberg indicates. Prices pared gains after the Energy Information Administration said U.S. inventories increased 2.52 million barrels last week to 393.8 million barrels a day. Analysts surveyed by Bloomberg had expected a drop of 1.5 million. Supplies surged to 397.6 million on May 24, the most since 1931. “We are not running out of oil,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “This is a clearly a bearish dataset overall.” Gasoline supplies climbed 1.3 percent to 221.5 million barrels, the highest level since April 12, the EIA, the Energy Department’s statistical arm, reported. Distillate fuels, including diesel and heating oil, dropped 0.9 percent to 122.1 million barrels. Demand for gasoline dropped 2 percent to 8.65 million barrels a day, the lowest level at this time of the year since 2003. ‘Weak Fundamentals’ “When you combine those two increases in crude and gasoline and compare them with falling demand, it’s another indicator that we have weak fundamentals,” McGillian said. Inventories at Cushing, Oklahoma, the delivery point for New York futures, fell 1.5 percent to 49.3 million barrels. “If you can focus narrowly on Cushing inventories, you do see a decline,” Evans said. The International Energy Agency trimmed demand forecasts today for the amount of oil the Organization of Petroleum Exporting Countries needs to supply in the second half of 2013 on signs of slower Chinese growth. “China has consistently been the focal point of global demand growth,” said Tom Finlon, the Jupiter, Florida-based director of Energy Analytics Group LLC. “If you have a projection for slower demand growth there, you’ll see prices be pressured.” To contact the reporter on this story: Moming Zhou in New York at [email protected] To contact the editor responsible for this story: Dan Stets at [email protected] ®2013 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Posted on: Wed, 12 Jun 2013 16:47:27 +0000
Trending Topics
Recently Viewed Topics
© 2015