Crude Oil Price: $96.69
Nymex Crude Rallies to 3-Week High as Equities Climb
Crude-oil futures settled at a three-week high Thursday in a late-session rally, amid a rally in the equity market and encouraging data on the U.S. economy.
Light, sweet crude for July delivery settled 81 cents, or 0.8%, higher at $96.69 a barrel on the New York Mercantile Exchange, the highest settlement since May 20. Brent crude on the ICE Futures Europe settled 76 cents, or 0.7%, higher at $104.25 a barrel.
Futures spent much of the day little changed, but rallied late in the session as other markets pushed to intraday highs. Craig Turner, commodity futures broker at Daniels Trading, said oil pushed higher with equities, with the Standard & Poor’s 500 Index recently gaining 1.2% to 1,632.
Meanwhile, the Japanese yen touched a two-month high against the dollar early Thursday. A weaker dollar typically lifts the price of crude by making the dollar-denominated commodity cheaper for holders of other currencies.
Traders were also encouraged by positive economic news out of the U.S., the world’s biggest oil consumer. The Labor Department said initial claims for jobless benefits fell by 12,000 to 334,000 for the week ended Saturday. The number of new claims was lower than economists’ estimates. The Commerce Department also reported that retail sales were up 0.6% in May on the back of higher automobile sales, compared to expectations of 0.4% growth.
The reports offer a snapshot of the state of the labor market and consumer confidence, which could reflect in greater energy use by businesses and motorists heading to work or retail stores.
Oil futures have been bobbing around $95 a barrel for much of the last two months, as traders remain uncertain about the outlook for global economic growth. Weakness in Europe and a slowdown in China has kept a lid on oil prices, while uncertainty over the fate of central-bank stimulus measures have also left traders cautious.
Other data released this week offered a less encouraging economic picture. The World Bank late Wednesday lowered global economic growth to 2.2% in 2013 from 2.4% in January. It also lowered its expectations for growth China, the second-largest oil consumer, by 0.7 percentage point to 7.7% this year.
Front-month July reformulated gasoline blendstock, or RBOB, settled 5.12 cents higher at $2.8613 a gallon. July heating oil settled 4.43 cents higher at $2.9395 a gallon.Read More
Crude Oil Price: $93.74
Nymex Crude-Oil Ends Higher as Dollar Falls
Crude-oil futures settled higher Thursday as the dollar tumbled and concerns grew about the strength of the U.S. recovery ahead of Friday’s jobs data.
Investors have become increasingly worried that economic data are signalling a weaker outlook in the U.S., the world’s largest oil consumer. But on Thursday, oil gained despite these concerns after the dollar fell sharply against the yen, the euro and other major currencies. Crude-oil is denominated in dollars, so a sharp fall in the dollar makes oil cheaper for buyers overseas using other currencies.
“The main story is the dramatic weakness in the dollar,” said Tariq Zahir, managing member of oil-trading firm Tyche Capital Advisors.
Light, sweet crude for July delivery settled $1.02, or 1.1%, higher at $94.76 a barrel on the New York Mercantile Exchange, the highest since May 28.
Brent crude on the ICE Futures Europe settled 57 cents higher at $103.61 a barrel.
The euro was recently trading at $1.3244, up 1.2% from Wednesday, while the ICE dollar index, a measure of the dollar against a basket of currencies was down 1.3%. The dollar also fell to its lowest level against the yen since April 16.
The swings in oil, currency and stock markets Thursday come a day ahead of the May U.S. nonfarm payrolls report. The jobs report from the Labor Department is one of the most closely watched indicators of the health of the domestic economy, and after a weak report on weekly jobless claims early Thursday, investors are bracing for a volatile session.
Economists expect the Labor Department to report that the U.S. economy created a seasonally adjusted 169,000 jobs in May.
The market has paid close attention to jobs data throughout the economic recovery. Higher employment would likely mean more drivers on the roads and rising energy use by businesses.
But some market watchers have said that declines in unemployment could put pressure on oil prices as it may prompt the Federal Reserve to curtail its bond-buying program.
“The expectations and impact of tomorrow’s employment report are much less predictable than they normally are,” said Jason Schenker, president of Prestige Economics. “A good report could be bad for equity and commodity markets.”
Front-month July reformulated gasoline blendstock, or RBOB, settled 2.79 cents higher at $2.8509 a gallon. July ULSD heating oil settled 1.60 cents higher at $2.8714 a gallon.
Crude Oil Price: $93.61
Oil Futures Settle Higher As Gasoline Demand Picks Up
Crude-oil futures settled higher in a volatile session Thursday, lifted by an uptick in gasoline demand and a drop in U.S. inventories of the fuel ahead of the summer driving season.
Gasoline demand last week climbed to its highest level since August, the Energy Information Administration said in a weekly report. Traders largely shrugged off the agency’s reading on oil inventories, which showed stockpiles shot to their highest level in 82 years.
“Guys were pretty encouraged by the gasoline number, and it is gasoline season,” said Peter Donovan, vice president of Vantage Trading, an oil options brokerage in New York. “Forget about the crude, forget about the [heating oil] for a minute. Just look at the gas number.”
Light, sweet crude for July delivery settled 48 cents, or 0.5%, higher at $93.61 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled down 24 cents, or 0.2%, to $102.19 a barrel.
The EIA reported gasoline stockpiles last week fell by 1.5 million barrels–well above the 200,000-barrel decline forecast by analysts in a Dow Jones Newswires survey.
Gasoline futures shot higher after the report, with the front-month June contract settling 0.94 cent, or 0.3%, higher at $2.8125 a gallon.
Oil stockpiles, meanwhile, rose by 3 million barrels to the highest level since May 1931, according to the EIA. Previously crude stockpiles had been hovering near their highest level since 1981. But the latest gain put stocks at their highest level for 82 years, according to the EIA.
Such a sizeable rise would normally be a weight on oil prices, but the figure failed to roil the market. Traders say they were more focused on the gasoline figure, while the year-on-year surplus of oil inventories has been shrinking recently.
Distillate stockpiles, including heating oil and diesel, rose 400,000 barrels last week, while refinery runs fell 0.9 percentage point to 86.4% of capacity.
Analysts had forecast a 400,000 barrel drop in oil inventories and a 200,000 barrel rise in distillate stocks. Refinery runs were seen rising 0.4 percentage point.
Oil futures have been caught in a tight range between $90 and $97 a barrel for most of May, as tepid economic growth in much of the world has kept prices in check while Middle East tensions keep a floor under prices.
On Friday, oil market watchers will shift their attention to Vienna, where a meeting of the Organization of the Petroleum Exporting Countries was underway. Ali al-Naimi, oil minister of Saudi Arabia, signaled approval of current oil prices, a sign that ministers won’t change output policy at their Friday meeting in Vienna.
Dominick Chirichella, analyst at the Energy Management Institute in New York, said he wouldn’t be surprised if the cartel winds up modestly cutting output. The group has been marred by a split between Saudi Arabia, the world’s biggest exporter, and smaller members who want higher oil prices and are concerned about losing their clout because of surging North American oil production.
“The general consensus is that everyone’s expecting a rollover agreement,” he said. “They might make a token cut, just to let everyone know they’re still there.”
June heating oil settled 2.64 cents, or 0.9%, lower at $2.8431 a gallon.Read More
Crude Oil Price: $94.25
Crude-Oil Futures Settle 3 Cents Lower at $94.25/Barrel
Crude-oil futures prices slashed deep early losses and rebounded with equities prices to settle just three cents lower at $94.25 a barrel Thursday.
Oil shed more than $2 a barrel in the late comeback, after it languished through most of the day amid broader market weakness as global traders turned risk averse. Worries that the U.S. Federal Reserve may be nearing the time when its starts scaling back its massive bond buying program unhinged markets on Wednesday and echoed into Thursday’s trade. Japan’s stock market closed down by 7.3%, the biggest drop since the earthquake/tsunami disaster of March 2011 that triggered a nuclear-plant crisis.
Pressure on prices built after signs from China, the world’s second-biggest oil consumer, that its manufacturing sector posted its biggest decline seven months.
But sellers began withdrawing after U.S. equities began recovering, with some investors likely squaring their positions in advance of the Memorial Day holiday, which will shut U.S. markets Monday.
“We started turning around when the Dow went positive,” said Addison Armstrong, director of market research at Tradition Energy, referring to the Dow Jones Industrial Average. “With the three-day weekend coming some people are squaring up and taking their chips off the table.”
Light, sweet crude oil for July delivery on the New York Mercantile Exchange settled three cents lower, at $94.25 a barrel. Prices moved broadly in a near-$2 trading range, hitting a low of $92.21 a barrel.
July North Sea Brent crude oil futures on the InterContinental Exchange settled 16 cents lower at $102.44 a barrel, after trading as low as $100.64 a barrel.
Despite the rebound, after two days of losses, traders said the market remains worried about the potential for oil demand growth.
In China, the preliminary Manufacturing Purchasing Managers’ Index fell to 49.6 in May from 50.4 in April. A figure below 50 signals a contraction in the sector. That raises concerns about a potential slowdown in China’s growing appetite for oil.
China is expected to account for half of total world oil-demand growth of 890,000 barrels a day this year, according to a forecast by the U.S. Energy Information Administration.
“If we’re not going to get it from there, we’ve got a problem,” said Kyle Cooper, analyst at IAF Advisors. “There’ll be no demand growth and a lot of crude around the world and the U.S. already is awash in petroleum products.”
U.S. government data released Wednesday showed the U.S. gasoline stockpiles rose by three million barrels in the latest week, against expectations of a modest decline. Higher refinery output and imports and reduced exports fed the gain and left inventories at nearly 10% above year-earlier levels. That surplus, the biggest since August 2010, signals that supplies aren’t likely to be an issue during the peak driving season. Meanwhie, crude oil stocks remain near their highest level since April 1981, keeping pressure on prices.
Traders said oil prices have gained much of their recent support from the economic-stimulus programs in the U.S., the EU and Japan, rather than from oil supply-demand fundamentals.
“If any of these programs are nearing an end the oil complex will likely be hit with a very strong correction to the downside as oil prices are still overvalued,” said Dominick Chirichella, analyst at the Energy Management Institute.
Reformulated gasoline blendstock futures for June delivery settled 0.87 cent higher, at $2.8281 as gallon, after an 8.75-cent drop in the prior three days.
June heating oil settled 1.36 cents lower at $2.86 a gallon. The contract lost 9.08 cents in the past three sessions. Heating oil trades as a proxy for diesel fuel, which powers trucks and trains nationwide.Read More
Crude Oil Price: $95.16
Crude-Oil Futures Settle up 86 Cents at $95.16/Barrel
Crude-oil futures prices settled higher Thursday, climbing on hopes for rising demand as the peak summer gasoline demand season approaches.
Prices also were propped up early by weakness in the dollar after disappointing U.S. economic data, including a bigger-than-expected rise in new claims for jobless benefits and a sharp drop in housing construction.
While the data suggest a sputtering recovery in the U.S. economy, which could keep limit demand growth in the world’s biggest oil consumer, analyst said it was, conversely, sending bullish signals to the oil market.
“We had bad data across the board, but that just means the Fed will continue the stimulus and that is supportive for the market,” said Gene McGillian, broker and analyst at Tradition Energy.
Light, sweet crude oil for June delivery on the New York Mercantile Exchange settled 86 cents higher, at $95.16 a barrel. ICE North Sea Brent crude for June delivery expired 12 cents higher, at $103.80 a barrel.
Traders said the market is looking beyond signs of oversupply and weak demand and hoping for a shift in fundamentals as the peak summer driving season nears.
U.S. crude oil stocks stand near their highest level since April 1981, and demand for gasoline was weak ahead of summer driving season, while inventories have climbed.
Carl Larry, analyst at Oil Outlooks and Opinions, said traders appear to be looking beyond weekly oil inventory data with a hope that gasoline use will pick up in the summer months and that refiners will need to pare down crude oil stocks to meet consumer needs.
The Energy Information Administration projects gasoline demand will slip to a 12-year low during the peak spring-summer driving season. But demand is expected to rise seasonally to 9 million barrels a day, on average, in June-August, compared with the 8.34 million barrels a day reported by EIA for last week.
Reformulated gasoline for June delivery settled up 1.52 cents, at $2.8822 a gallon, but down from an earlier one-month intraday high. June heating oil settled 2.86 cents higher, at $2.9087 a gallon.Read More
Crude Oil Price: $96.62
US Crude Oil Futures Settle Down; Products Hit One-Month High
U.S. crude oil futures ended weaker but above the day’s lows, while refined products futures hit one-month highs on hopes of a coming improvement in the economy of the world’s biggest oil consumer.
Oil traders looked beyond the highest stocks of U.S. crude oil in 32 years, and the current sluggish growth in fuel consumption, to bid up prices late in the session. Analysts said the rally was spurred by the hope that strong indicators from the U.S. market would jump-start sputtering oil demand.
The Labor Department’s count of new weekly claims for unemployment benefits came in lower than economists had forecast, while a widely watched indicator of layoffs fell to prerecession levels for the first time. The four-week average of benefits claims dropped to the lowest level since November 2007.
“There’s a little bit more optimism there, but I think we have to see it play out a little longer,” said Gene McGillian, broker and analyst at Tradition Energy.
Light, sweet crude oil for June delivery on the New York Mercantile Exchange settled down 23 cents, at $96.39 a barrel, but up more than $1 from the session low of $95.35.
June Brent crude oil on the InterContinental Exchange shed earlier losses to settle 13 cents higher, at $104.47 a barrel.
Brent’s premium to the U.S. benchmark was $8.08 a barrel at the settlement, up from $7.72 a day earlier, which was the lowest level since Jan. 20, 2011.
Brent’s premium to the U.S. benchmark has narrowed considerably as rapidly rising domestic crude oil output makes its way to the key Gulf Coast refining region, displacing imports of Brent and similar crudes.
Refiners are shipping oil from the midcontinent to the Gulf by truck and rail, as well as pipelines, chipping away at the supply surplus in landlocked Cushing, Okla. Oil inventories at the hub, which is the delivery point for the Nymex futures contract, have fallen by 2 million barrels in the past two weeks. The year-on-year surplus has dropped to 5 million barrels from nearly 24 million barrels in January.
As the regional bottleneck eases, the Brent premium has narrowed to near $8 a barrel, from $17 a barrel early this year.
Crude prices had been under pressure from government data showing stocks rose modestly last week to the highest level since April 1981. The Energy Information Administration also said in its weekly oil supply/demand report Thursday that demand for gasoline, the most widely used petroleum product in the nation, dropped by 400,000 barrels a day last week from the year-earlier level. The 4.7% drop was the biggest at the early May start of the driving season since 1994.
But traders said there is widespread hope that increasing refinining activity will reduce the deep inventories and that a pickup in the economy will boost demand for refined products, even as the EIA sees summer gasoline use slipping to a 12-year low in the peak spring-summer driving season.
In June, the EIA projects crude oil processing at refineries will average 15.6 million barrels, up about 440,000 barrels a day above current levels, and crude stocks will fall by about 12 million barrels by the end of June, to just below year-earlier levels. Stocks are now above the year-earlier level by 16 million barrels, or 4.2%.
Tim Evans, analyst at Citi Futures, warned that these expectations make for “a weak bullish arguement” because if fuel demand doesn’t improve, the problem of high crude oil stocks is simply shifted in the refined products market.
June heating oil futures settled 2.19 cents higher, at $2.9366 a gallon, the highest level since April 10.
Reformulated gasoline blendstock futures for June delivery settled at the highest level since April 9, gaining 3.13 cents, to $2.8851 a gallon.Read More
Crude Oil Price: $93.99
Crude-Oil Futures Post Biggest Rise in Five Months
Crude-oil futures jumped 3.3% Thursday to settle at $93.99 a barrel, as a combination of economic signals overcame worries about weak oil demand and high inventories.
Traders said prices were due for a rebound after both the U.S. and European benchmark crudes shed 3.7% over the previous two days on signs of sluggish demand growth in the U.S. and China, the world’s top two oil consumers.
The oil rally was slow to start, despite a move by the European Central Bank to cut its main refinancing rate by 25 basis points and news that new claims for U.S. unemployment benefits hit a five-year low in the latest week. But strength in U.S. equities prices sparked a risk-on sentiment that spurred oil-market players to jettison worries about an oversupplied market, including the highest U.S. crude stocks since 1981.
The Standard and Poors 500-share index posted its biggest gain since April 23 and closed at a record high.
“The equities are pushing higher and we’re seeing some carry over into crude,” said Gene McGillian, analyst and broker at Tradition Energy.
Traders said the market’s hope is that the strong signal from the latest U.S. weekly jobs figure will translate into a healthy showing in Friday’s widely watched figure for April non-farm payrolls.
Light, sweet crude oil for June delivery settled 3.3%, or $2.96 higher, at $93.99 a barrel. The gain was the biggest single-day rise since Nov. 6, 2012. But prices still are 51 cents below Monday’s settlement.
ICE June Brent crude settled 2.9%, or $2.90 higher, at $102.85 a barrel. Brent’s rise also was the biggest since Nov. 6.
“I don’t think anyone thinks that everything is full-speed ahead in the global economy now. We are in a near-term range of $85-$98 a barrel and we can see a $1 or $2 move without any problem,” Mr. McGillian said.
“If you look solely at the supply figures, we should be falling out of bed,” said Phil Flynn, analyst at Price Futures. But he said moves by the ECB, the U.S. Federal Reserve and the Bank of Japan to add stimulus to the market were overwhelming the poor market fundamentals.
Data from the Energy Information Administration, released Wednesday, showed that U.S. implied demand for gasoline fell 3.8% last week to its lowest level at the end April in 10 years. Inventory levels are now sufficient to cover 25.7 days of current weak demand, the highest level of cover in end April since 1999.
June-delivery reformulated gasoline futures settled up 2.3%, or 6.13 cents higher, at $2.7806 a gallon. The contract fell 3% Wednesday, its biggest one-day drop in four weeks, in response to the EIA data. In a sign of the scope of recent market volatility, the sharp rise was on the second-largest in the past week, as then-front-month May futures climbed 6.44 cents a gallon on April 25.
June heating oil settled up 2.4%, or 6.66 cents higher, at $2.855 a gallon. Heating oil posted the biggest one-day dollar and percentage gain since Nov. 19, 2012 in snapping a four-day losing streak.Read More
Crude Oil Price: $93.64
Crude Oil Futures Settle at Two-Week Highs on Supply Concerns
Crude-oil futures prices settled at two-week highs Thursday on concerns over tightening supplies, while U.S. gasoline demand heats up ahead of the peak spring-summer driving season.
Traders said weakness in the dollar, rising equities prices and news that U.S. weekly claims for jobless benefits fell to the lowest level in nearly five years added to buying interest.
“There are a bunch of things going on. There does seem to be some risk-on buying in the last couple of days,” said Andy Lebow, senior vice president for energy futures at Jefferies Bache. Mr. Lebow and others said oil-market investors are sensing that oil demand in the U.S. will be stronger in the near term than elsewhere and are favoring the U.S. benchmark futures contract over internationally traded North Sea Brent crude.
Implied demand for gasoline–the most widely used petroleum product in the world’s biggest oil consumer–climbed to its highest level since November last week, U.S. government data showed. Gasoline stockpiles logged their biggest drop in a year, breathing new life into futures contracts that fell to a four-month low in recent days.
“People have been so down on demand. Whether it’s a fluke, or seasonal, it doesn’t really matter. There is a perception that demand is getting better,” said Phil Flynn, analyst at Price Futures.
The EIA has forecast that gasoline demand will be slightly down this spring-summer from a year-earlier and drop to a 12-year low. But the near-term strength is spilling over into crude oil prices, on expectations that refiners will use more to turn out more refined products.
Light, sweet crude oil for June delivery on the New York Mercantile Exchange climbed 2.4%, or $2.21 a barrel, to $93.64 a barrel, the highest price since April 10. The rise followed a 2.5% gain on Wednesday that was the biggest rise for the year.
June Brent crude oil on the InterContinental Exchange rose 1.68 a barrel, or 1.7%, to $103.41 a barrel, a two-week high. The gain was the biggest since Dec. 26.
Brent’s premium to the U.S. benchmark was $9.77 a barrel at the settlement, the smallest since Jan. 3, 2012. The spread topped $23 a barrel as recently as early February, but surging U.S. oil output, now at a 21-year high above 7.3 million barrels a day has cut deeply into U.S. crude imports, shrinking Brent’s value to the U.S. benchmark.
New technologies such as hydraulic fracturing and horizontal drilling have unlocked vast oil reserve trapped in shale, pushing U.S. output higher by 20% this year and by 1.2 million barrels a day from a year ago. Imports have dropped by as much as domestic output has risen, as crude supplies make their way to the Gulf Coast refining hub, eliminating the need for foreign barrels which compete with Brent.
Brent found support Thursday from a Reuters report quoting industry sources saying that work on a gas pipeline will cut crude oil output from the seven-field Norwegian Ekofisk complex for three weeks this June. Ekofisk produces around 170,000 barrels a day of crude.
Buoyant gasoline future found further strength from a fire at a unit of a Louisiana refinery that makes octane enhancers for gasoline.
The fire, at a reformer unit at Alon USA Energy Inc.’s 83,000-barrels-a-day Krotz Springs, La., was quickly extinguished, the company said. But the impact on operations at the plant isn’t yet clear.
Nymex May reformulated gasoline futures posted their biggest gain since March, rising 6.44 cents, or 2.3%, to settle at $2.8118 a gallon, a two-week high.
Heating oil for May delivery rose for a sixth straight session, settling 6.04 cents, or 2.1% higher, at $2.9017 a gallon. The rise was the biggest since Nov. 19, 2012, and put prices at a two-week high. The heating oil contract trades as a proxy for ultra-low sulfur diesel fuel, which fuels trucks and trains.Read More
Crude Oil Price: $87.73
Crude Oil Settles Higher on Bargain Buying after Recent Sharp Drop
Crude-oil futures prices settled higher Thursday amid bargain-hunting after a recent steep selloff, with North Sea Brent posting its first gain after six down days.
News of lower exports of Nigerian crude oil buoyed prices of European benchmark Brent crude, which had tumbled in the past six session to its lowest level since July 2. Royal Dutch Shell’s (RDSA, RDSA.LN) Nigerian unit said it cut output of Bonny Light crude oil by 150,000 barrels a day and halted exports in order to resolve issues with a key oil pipeline.
Traders said an extended outage in shipments of the Brent lookalike would underpin prices of the European benchmark. But the overall supply-demand picture for oil remains weak, amid stuttering signs of economy recovery in the U.S., the world’s biggest oil consumer.
“We are a slave to the economy right now and the picture’s not particularly great,” said Carl Larry, analyst at Oil Outlooks and Opinions.
June North Sea Brent crude oil futures on the InterContinental Exchange settled 1.5%, or $1.44, higher at $99.13 a barrel, after six days of declines. The June contract traded in a high-low range of near $10 a barrel since April 10, dropping 8%, or nearly $8.50 a barrel in the period.
May-delivery light, sweet crude oil futures on the New York Mercantile Exchange settled 1.2%, or $1.01 higher, at $88.20 a barrel, after settling Wednesday at a four-month low.
U.S. benchmark crude has dropped by more than $10 a barrel from highs in early April, as domestic crude oil and gasoline inventories have climbed, while demand for fuels remains sluggish. Front-month Brent, has fallen by about $12 a barrel this month, and the three-day string of prices below $100 a barrel is the longest since June 2012.
“We’ve lopped off $12 and it looks like we’re wrapping up the selloff and starting to stabilize here,” said Gene McGillian, broker and analyst at Tradition Energy. “But it’s not that all of sudden we have confidence that the economy is improving.”
The Labor Department said Thursday the number of U.S. workers applying for jobless benefits last week rose by more than economists had expected. Elsewhere, the Conference Board said its index of leading economic indicators posted an unexpected fall in March, as consumers turned gloomy on the economic outlook. The index declined 0.1% in March, its first fall since August, and counter to an expected 0.2% rise recorded in a survey of economists by Dow Jones Newswires.
U.S. gasoline demand dropped to a one-month low and was the lowest for the second week in April in 16 years, government data released on Thursday show. Demand of 8.383 million barrels a day last week was nearly 400,000 barrels a day below the year-earlier level.
The Energy Information Administration forecasted last week that gains in fuel-efficient vehicles will trim spring-summer driving season demand this year to a 12-year low of 8.877 million barrels a day.
Nymex May reformulated gasoline blendstock futures posted the first gain after falling 12%, or 37.25 cents in five of the previous six sessions to a three-month low. The contract settled up 2.65 cents, or 1%, Thursday, at $2.7555 a gallon.
Nymex May heating oil futures settled 4.45 cents, or 1.6%, higher, at $2.7791 a gallon. Prices fell 7.7% over the previous six days to the lowest level since July 2012.Read More
Crude Oil Price: $94.64
Crude Oil Slips as Demand Outlook Weakens
U.S. crude-oil futures fell Thursday as slumping gasoline prices and forecasts for weaker global demand weighed on the oil market.
Light, sweet crude for May delivery settled $1.13, or 1.2%, lower at $93.51 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell $1.60 to $104.19 a barrel.
Oil declined in tandem with gasoline futures, which settled at the lowest level since January as traders continue to flee from rising domestic supplies. Reformulated gasoline blendstock, or RBOB, has fallen 8.8% in April, and settled 3.41 cents lower Thursday at $2.8310 a gallon.
On Wednesday, the U.S. Energy Information Administration said U.S. gasoline stockpiles rose 1.7 million barrels last week. Imports to the U.S. East Coast rose 64% from the week earlier period to the highest levels since August, and stockpiles in this high-demand region are now 5.4% above the five-year average level for this time of year.
“You’ve got flat U.S. demand and growing production,” said Andy Lebow, an oil broker at Jefferies Bache in New York. “The market’s reached this moment, it’s a moment of clarity” about high supplies, he said.
Oil futures have fallen for most of 2013, and after peaking in March U.S. gasoline prices have also tumbled. Refineries that shut down earlier this year for scheduled maintenance periods have started to ramp up operations, churning out more fuel despite tepid demand from drivers.
Weak gasoline demand is helping to lower prices at the pump. National average retail regular gasoline prices fell to $3.564 a gallon Thursday, according to the daily AAA Fuel Gauge Report. Prices are down from $3.703 a gallon a month ago.
Still, dimmer prospects for fuel use aren’t confined to the U.S. The International Energy Agency, which represents a group of the world’s largest oil-consuming countries, cut its forecast for 2013 oil-demand growth by 25,000 barrels a day to 90.6 million barrels a day due to falling fuel use in industrialized countries, particularly in Europe.
The IEA’s revised outlook follows similar reports this week from the Organization of the Petroleum Exporting Countries and the Energy Information Administration. Both groups cut their forecasts for world oil-demand growth this year.
A weaker outlook on fuel usage this year, coupled with surging U.S. production and an improving supply outlook in other regions, is keeping a lid on global oil prices.
May heating oil settled 4.88 cents lower Thursday at $2.8991 a gallon.Read More