US Stocks Decline; Gold, Crude Oil and Copper Falls

U.S. Stocks Decline From Record Highs After Services Data

U.S. stocks fell, after the Standard & Poor’s 500 Index climbed to a record high last week, even as data showed service industries grew at a faster pace in July. The S&P 500 slipped 0.2 percent to 1,706.77 at 10:09 a.m. in New York. The S&P 500 is trading at 15.5 times estimated earnings, compared with an average of 13.9 over the last five years, data compiled by Bloomberg showed.


Gold Bulls Cut Wagers on Signs U.S. Growth Quickens: Commodities

Hedge funds lowered bullish gold bets for the first time in five weeks as signs of accelerating U.S. growth contributed to the longest retreat in prices in a month. Gold futures declined 0.9 percent last week, the first drop since the week ended July 5.

WTI Crude Falls for Second Day After Libya Reopens Port

West Texas Intermediate crude fell for a second day after Libya reopened a terminal closed by protests. Futures dropped as much as 1.2 percent as Libyan officials said the Marsa el Hrega port was operating and all oil fields in Libya’s western region returned to normal. WTI crude for September delivery declined 92 cents, or 0.9 percent, to $106.02 a barrel at 9:40 a.m. on the New York Mercantile Exchange. Libya, holder of Africa’s largest crude reserves, is currently pumping 700,000 barrels a day, which should rise to 800,000 barrels next month.



Copper Falls as Chinese Service Stagnation Fuels Demand Concern

Copper fell in New York after three sessions of gains as a stagnant index of service industries in China stoked concern about the outlook for demand in the world’s largest consumer of the metal. Copper for delivery in September slid 0.6 percent to $3.153 a pound by 7:51 a.m. on the Comex in New York. Copper for delivery in three months fell 0.6 percent to $6,962 a metric ton on the London Metal Exchange. Copper stockpiles monitored by the LME fell for a 14th session to 606,900 tons, daily exchange figures showed. Orders to remove the metal from warehouses rose 2.3 percent, the most since June 27, to 324,300 tons.

Aluminum, zinc and nickel slid in London. Lead and tin rose.

Oil Inventories Report

Oil Stocks

OECD commercial oil stocks rose by 11.7 mb in May, broadly in line with the five-year average.
Crude stocks showed a surplus of 13 mb, while product inventories indicated a deficit of 17.3 mb.
In terms of days of forward cover, OECD commercial stocks stood at 58.9 days.
Preliminary data for June shows that US total commercial oil stocks rose by 14.2 mb for a surplus of 48.2 mb with the five-year average.
US crude and product stocks were at 33.8 mb and 14.4 mb, respectively, both above the five-year average.

~ Issued 10 July 2013

Crude ends under $80 for the first time since mid March

SAN FRANCISCO (MarketWatch) -- Oil prices settled under $80 a barrel on Wednesday, pulled down by a stronger U.S. dollar, concerns about the political unrest in Greece and the state of other European economies, and a higher-than-expected rise in crude inventories.

Crude oil for June delivery slumped $2.77, or 3.4%, to $79.97 a barrel on the Comex division of the New York Mercantile Exchange. That is the lowest price for a most-active contract since March 15, according to FactSet Research.

Losses were deeper mid-morning and in the last hour of trading.

"People are worried that the bull market is over, that maybe we are seeing the tipping point," said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Mass.

Macroeconomic backdrop and the falling euro at the center of their concerns dominated trading.

Investors are feeling that prices pushing towards $90 a barrel recently were not "appropriate for this point in the economic recovery," Lynch said. "People were wondering when it would be time to sell, and it looks like the sell-off is here."

The euro fell to $1.2825 but came off lows hit earlier in the session, while the dollar index /quotes/comstock/11j!i:dxy0 (DXY 83.96, -0.12, -0.14%) rose 0.9% to 84.06.

Worries about a potential debt crisis in Europe flared up again Wednesday as Moody's Investors Service placed Portugal's debt under review for a possible downgrade and violence erupted in Greece following a nationwide strike. Three people were killed after fires broke out at riots near an Athens bank. Read more on Greek violence.

The Energy Information Administration on Wednesday said crude-oil inventories rose 2.8 million barrels in the week ended April 30, which included a 1.7 million increase in inventories in Cushing, Okla., the delivery point for Nymex oil.

Analysts surveyed by Platts had expected crude stocks to increase by 1.54 million barrels.

Gasoline stockpiles rose by 1.2 million, the EIA said, when the expectation was of a modest rise of 200,000 barrels.

Refineries operated at 89.6% of their operable capacity, the EIA said. The refinery utilization rate expected by the analysts polled was 88.66%.

Gasoline futures were the worst-hit among energy products on Monday. Gasoline for June delivery declined 10 cents, or 4.4%, to $2.22 a gallon, reverting to prices last seen in late March.

Natural gas for June delivery retreated 2 cents, or 0.6%, to $3.99 per million British thermal units.

Analysts polled by Platts expect the EIA to report an increase by 80 to 84 billion cubic feet for natural gas in storage in the week ended April 30. The agency releases its weekly report on natural-gas storages Thursday at 10:30 a.m. Eastern.

Oil trimmed some its losses earlier after the April ISM nonmanufacturing index. The index came in under expectations at 55.4, unchanged with March's level, but investors took heart it didn't show an economic contraction.

News that private-sector companies added 32,000 jobs in April, according to the ADP employment report released Wednesday, did little to change oil's direction. The increase in ADP employment was in line with expectations.

Oil prices fall as hurricane Ida fades, US$ climbs

Published: Wednesday November 11, 2009 MYT 7:44:00 AM
Oil prices fall as hurricane Ida fades, US$ climbs

NEW YORK:
Oil prices fell Tuesday as workers headed back to deep sea platforms that were bypassed by a rapidly weakening storm in the Gulf of Mexico. Ida, once a Category 1 hurricane, was downgraded to a tropical storm Monday and then lost even that status Tuesday as its winds lost their punch. Producers like Royal Dutch Shell and Anadarko reported no damage to facilities and said flights bringing workers back to abandoned platforms and rigs would begin Tuesday.

Benchmark crude for December delivery fell 38 cents to settle at $79.05 a barrel on the New York Mercantile Exchange. Even on Monday, when Tropical Storm Ida posed a potential threat to Gulf platforms, it appeared that the affects of a weakened dollar played a more significant role as oil prices rose $2 to $79.43.

The dollar tumbled so far to start the week, a person holding a euro could trade it in for $1.50, the first time the U.S. currency has been that weak since July. Because crude is traded in dollars, that means an investor could trade in euros for dollars and buy oil for a relative bargain. Even though there are huge supplies of crude right now, the sagging dollar allows investors to buy oil and pay for storate, selling the oil months later when the price is right. On Tuesday, however, the dollar regained ground and crude prices fell.

The response to oil company activity in the Gulf ahead of the storm was muted.
Companies shut down 30 percent of oil production and 27 percent of natural gas production and evacuated about 18 percent of nearly 700 platforms, according to the U.S. Minerals Management Service.

In the past, that would have been enough to send prices soaring by $5 to $10 per barrel.
Last year, U.S. retail gasoline prices spiked when hurricanes Ike and Gustav cut off supply routes, particularly in the Southeast. But Ida was weak compared with those storms and demand for fuel is not much better.

Prices at the pump edged lower overnight, falling 0.6 cents to $2.658 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. The Energy Department late Monday reported that retail gasoline prices fell for the first time in five weeks.

The International Energy Agency lowered its global oil demand forecast as well on Tuesday from 106 million barrels per day to 105 million barrels per day. New technologies that have opened up vast reserves of natural gas will lead to a glut in supply for at least the next several years, the IEA said.

Natural gas for December delivery plunged 4 percent, or 20.3 cents, to settle at $4.467 per 1,000 cubic feet on Nymex. In other Nymex trading, heating oil fell a penny to settle at $2.0523 a gallon. Gasoline for December delivery fell less than a penny to settle at $1.9774 a gallon.
In London, Brent crude for December delivery fell 27 cents to settle at $76.50 on the ICE Futures exchange. - AP
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Sept 23 ~ Crude Oil Supplies 335.6 m , Inventories 9.1% above 5yr average

Oil Set for Biggest Weekly Drop Since July on Recovery Concern
By Ben Sharples

Sept. 25 (Bloomberg) -- Oil in New York is poised for its biggest weekly drop since July after U.S. sales of existing homes unexpectedly slumped, bolstering skepticism about the pace of recovery in the biggest energy consuming nation.

Oil has dropped 9 percent this week as an Energy Information Administration report showed a gain in U.S. fuel stockpiles, boosting speculation of a supply glut. Prices are also under pressure from a stronger dollar, which reduces the appeal of commodities as an inflation hedge.

“The home sales data in the U.S. was a trigger that contributed to a tumble in the oil price,” said David Moore, a commodity strategist with Commonwealth Bank of Australia. “The oil data from the EIA is relatively bearish, and on top of that the U.S. dollar recovered a little bit of ground.”

Crude oil for November delivery traded at $65.87 a barrel, down 2 cents, on the New York Mercantile Exchange at 9:56 a.m. in Sydney. Futures, which dropped 4.5 percent yesterday, are headed for the biggest decline since the week ended July 10. Prices have advanced 48 percent since the start of the year.

U.S. equities fell for a second day yesterday as sales of existing homes slumped and the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. The Standard & Poor’s 500 Index lost 1 percent in New York and the Dow Jones Industrial Average slipped 0.4 percent.

The dollar gained 0.1 percent to $1.4649 per euro at 9:57 in Sydney, from $1.4666 yesterday.

Supplies Increase

“We expect a hesitant recovery in the U.S. and in that context we’re going to get bits of data that disappoint, and that’s what we saw last night,” Moore said.

Supplies of crude oil rose 2.86 million barrels, to 335.6 million, the biggest increase since the week ended July 24, according to the Energy Department report released Sept. 23. Analysts had expected a 1.4 million-barrel decrease. The gain left stockpiles 9.1 percent above the five-year average.

U.S. gasoline stockpiles surged 5.41 million barrels last week, more than 10 times the gain forecast by analysts in a Bloomberg News survey, according to the report. Demand for the fuel slipped 2.3 percent to 8.79 million barrels a day, the lowest since January.

Inventories of distillate fuel, a category that includes heating oil and diesel, rose 2.96 million barrels, almost double analyst estimates.

“There has been a lot of talk about green shoots, but we are still shedding jobs and oil demand is still going to drop by 2 million barrels this year,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There comes a point when you have to pay attention to the fundamentals.”

Brent crude for November settlement rose 1 cent to $64.83 a barrel on the London-based ICE Futures Europe exchange at 10:06 a.m. Sydney time. Yesterday, the contract dropped $3.17, or 4.7 percent, to $64.82.
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OPEC : Press Release ~ No cut in Oil Production

The Conference reviewed current oil market conditions and future prospects and observed that, whilst there are signs that economic recovery is underway, there remains great concern about the magnitude and pace of this recovery, especially in the major industrialized nations of the OECD. There has been some easing of the overhang in crude oil stocks but market fundamentals remain weak, refinery utilization rates are low and product inventories have risen considerably.

Accordingly, since the market remains over-supplied and given the downside risks associated with the extremely fragile recovery, the Conference once again agreed to leave current production levels unchanged for the time being. In doing so, the Conference reiterated its determination to ensure sound supply fundamentals and an adequate level of spare capacity for the benefit of the world at large.

Similarly, the Conference recorded the readiness of Member Countries to rapidly respond to any developments which might jeopardize oil market stability and their interests. Therefore, in addition to continuing to maintain constant watch over supply/demand fundamentals, the Conference agreed to reassess the market situation at its 155th (Extraordinary) Meeting, to be held in Luanda, Angola, on 22nd December 2009.

Oil Price ~ 08 Sep 09 : US 68

Published: Tuesday September 8, 2009 MYT 2:54:17 PM
Oil near US$68 in Asia Tuesday

Oil prices hovered near US$68 a barrel Tuesday in Asia for a fifth day as the U.S. summer driving season wound down and OPEC planned to meet Wednesday.
Benchmark crude for October delivery was up 35 cents at $68.37 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

Trading was closed Monday in the U.S. for the Labor Day holiday, so the contract last settled on Friday at $68.02 after rising 6 cents. Labor Day is traditionally seen in the U.S. as the end of summer, and demand usually falls in the autumn before rebounding in the winter as heating oil consumption picks up.

"The seasonal demand is really coming to an end right now," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "It looks as if the bearish pressures are going to win out."

Leaders of the Organization of Petroleum Exporting Countries have signaled they plan to keep output levels unchanged at the group's meeting Wednesday in Vienna. That could send oil prices lower as traders eye OPEC members producing more and more over official quotas.

"Compliance levels have been dropping every month because many of the members have been cheating," Kornafel said. "So if they don't cut quotas, more oil will be entering the market."

In other Nymex trading, gasoline for October delivery fell 0.63 cent to $1.77 a gallon, and heating oil rose 0.98 cent to $1.73 a gallon. Natural gas dropped 6.8 cents to $2.66 per 1,000 cubic feet.

In London, Brent crude was up 46 cents to $66.99.
- AP
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US Crude Oil Inventories (29 Aug 09) dropped slightly

WASHINGTON, Sept. 2 (UPI)

U.S. crude oil inventories dropped by 0.4 million barrels in the week ending Aug. 28, the U.S. Energy Information Administration said Wednesday.

Crude inventories fell from 343.8 million barrels to 343.4 million barrels during the week but remain above the upper boundary of the average range for this week of the year, EIA said.

Gasoline inventories declined by 3 million barrels to 205.1 million barrels, but remain in the upper half of the average range.

Supplies of distillate fuels, which includes heating oil, rose by 1.2 million barrels to 163.6 million barrels.

Finished gasoline inventories and stocks of gasoline blending components both fell during the week, EIA reported.

At 9.2 million barrels a day, demand for gasoline over the past four weeks is 0.5 percent higher than demand during the same period a year ago.

Distillate fuel demand has dropped 7.3 percent in the past four weeks compared to a year ago.

Jet fuel demand is also down, off 12.1 percent from a year ago, the report said.

© 2009 United Press International, Inc. All Rights Reserved.
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Opec Not likely to cut Output

Published: Monday September 7, 2009 MYT 7:55:00 AM

OPEC not likely to cut output at Vienna Wed meeting

VIENNA: With oil prices about where OPEC wants them and a modest economic upturn in the offing, the oil cartel isn't likely to tighten the taps when its leaders meet this week in Vienna.
Prices have been hovering near $70 a barrel, and with returning growth expected to support demand, analysts don't expect the Organization of Petroleum Exporting Countries will feel any need to cut output targets.

"Absolutely nothing," said John Hall, of John Hall Associates in London.

OPEC President Jose Botelho de Vasconcelos, who is also Angola's oil minister, said last week that signs of recovery suggest the 12-member group won't need to intervene. "Everything shows they will keep output unchanged," he said.

Kuwait also says it thinks oil prices are stable and there's no need to cut production, even though stockpiles are rising. And Algeria, Kuwait, Libya, Qatar and the United Arab Emirates have signaled they're happy with the current output quota of just under 25 million barrels a day.

Saudi Arabia, OPEC's No. 1 producer and most influential member, has said $75 a barrel is a fair price for both consumers and producers - a level that would allow for continued investments in the oil sector without undermining efforts at global economic recovery. "Unless Saudi says, 'We're going to cut by a million barrels a day,' nothing's going to happen" at Wednesday's meeting, Hall said.

Benchmark crude for October delivery crested $68 a barrel Friday in electronic trading on the New York Mercantile Exchange. Over the past six weeks, it has fluctuated in the $65-$75 range amid conflicting signs of economic recovery.

OPEC meets more than a third of the world's annual oil demand, which the International Energy Agency has put at nearly 86 million barrels a day for 2008 - about 2.5 million barrels more than for recession-ridden 2009. The economic downturn has taken such a big bite out of demand for OPEC crude, it will take four more years just to recover to 2008 levels, the cartel predicts in its latest outlook.

Still, stockpiles abound despite recent OPEC production cuts: The U.S. Energy Department said last month that U.S. crude stocks rose by 200,000 barrels for the week ended Aug. 21.

"We're swimming in this stuff," said Stephen T. Schork, president of The Schork Group in Villanova, Pa., and editor of a newsletter tracking industry trends. Schork thinks OPEC may have to rein in output next March, but for now, oil prices "have settled into a range that the market can sustain," Schork said. "Oil that's $65 to $75 per barrel translates into gasoline prices of $2.50-$2.75 a gallon, and we know the consumer can handle that," he said.

Crude prices have taken a wild ride over the past year or so: They peaked at $147 a barrel in July 2008 and plunged close to $30 this past February before settling into their current range.
OPEC's oil market report for August cautioned that "the market is still fundamentally weak amid ample stocks of crude and products." Prices in the short term, it said, "will depend largely on economic developments."

But experts agree that markets will rebound. Morgan Stanley expects oil to average $85 a barrel in 2010, and crude prices are bound to rise with demand as the northern winter home-heating season draws near. Another perennial wild-card issue that threatens to drive up prices: hurricane season, which will run until early November and has the potential to disrupt refineries in the Gulf of Mexico. Experts say the flagging U.S. dollar - which has nudged crude prices up in recent days - also could be a factor if it keeps weakening against the euro.

The 12 OPEC members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

Iraq is the only member not bound by the cartel's production quotas.
- AP

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