Brent holds near $108 on cold spell, stimulus cut weighs * Drop in U.S. distillate stocks is more than double expectations -EIA * Federal Reserve cuts stimulus despite market turmoil * Libyan deputy prime minister survives attempt on life * Brent crude targets $108.72 -technicals Brent futures held near $108 a barrel on Thursday as bitter cold across the northern Hemisphere boosted heating oil demand, while the U.S. Federal Reserves move to trim its monetary stimulus weighed on prices. Weak Chinese manufacturing data and the Feds decision to stick with the plan to wind down economic stimulus despite recent turmoil in emerging markets weighed on riskier assets, including Asian shares. But losses in oil were limited as a fall in U.S. distillates stocks by more than double what was expected revived demand hopes in a seasonally weak period. Brent crude had slipped 6 cents to $107.79 a barrel by 0514 GMT, after settling 44 cents higher. U.S. oil rose 9 cents to $97.45 a barrel, having ended down 5 cents. A weak Chinese economy is a bearish factor for oil, said Ken Hasegawa, a commodity sales manager at Newedge Japan. But the market is finely balanced right now, with rising crude production being offset by an overall improvement in the global economy. The balance means oil will trade in a narrow range, Hasegawa said. Brent may stay between $107 and $108.50 a barrel, with the U.S. benchmark holding at the $96.50-$98.50 level, he said. The Feds move was widely expected, although some investors had speculated the U.S. central bank might put its plans on hold given the jitters overseas. A pullback in stimulus will strengthen the dollar, weighing on any commodities priced in the currency, such as oil. U.S. INVENTORIES U.S. distillate stocks fell 4.6 million barrels last week, data from the Energy Information Administration (EIA) showed, versus forecasts of a decrease of 2.2 million barrels. Distillate inventories were 116 million barrels nationwide in the week ended Jan. 24, and on the East Coast, which has suffered two cold snaps this month, they fell 3.8 million barrels to 29.5 million barrels, the lowest since April 2008. Crude stocks rose by 6.4 million barrels, far more than the 2.3 million barrel build expected in a poll, to 358 million barrels as refinery maintenance began. Distillate stocks fell despite an increase in refinery production and a fall in net exports of oil products out of the country, analysts at BNP Paribas said in a note. The higher production and fall in imports were insufficient to prevent the large stock draw that leaves (distillate) inventories far below the bottom of the five-year range for this time of year, BNP Paribas said. With colder than normal weather expected in coming days, stocks may decline further. Prices also remain supported by concerns over supply disruptions from the Middle East and North Africa. Libyas deputy prime minister survived unhurt after gunmen fired on his car in Tripoli on Wednesday in an attack reflecting the violent chaos plaguing the North African nation two years after Muammar Gaddafis fall.
Posted on: Thu, 30 Jan 2014 05:48:09 +0000
Trending Topics
Recently Viewed Topics
© 2015