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Crude Prices Retreat Amid Rising US Reserves
New York (AFP) Jan 25, 2007 Global oil prices skidded lower Thursday despite colder US winter weather as the market focused on rising energy reserves in the United States, analysts said. New York's main oil futures contract, light sweet crude for delivery in March, slumped 1.14 dollars to close at 54.23 dollars a barrel. In London, the price of Brent North Sea crude for March delivery slid 1.31 dollars to settle at 54.12 dollars a barrel. The advent of fresh snowfalls in parts of the US northeast Thursday did nothing to depress prices. As colder temperatures gripped Europe and the United States, oil prices had risen this week beyond 55 dollars per barrel. But Phil Flynn at Alaron Trading said: "Some weather forecasters are backing off some of the cold weather forecasts. And a UK tracking firm basically said that OPEC production went up last month." Oil prices have slumped since striking highs above 78 dollars a barrel last summer, prompting the Organization of the Petroleum Exporting Countries to twice announce cuts to its combined production in recent months. "The market now is doubting that it's going to get that cold and the market is doubting that OPEC is going to follow through on its production cut," Flynn said. "I think that kind of took the momentum out of the market today." Swelling US energy inventories had pressured prices on Wednesday, following sharp gains made on Tuesday in reaction to plans by President George W. Bush to double America's emergency oil reserves. "The stocks influenced the market yesterday but the fact that strategic reserves will increase their storage is a more important issue for the market at the moment," Bache Financial trader Tony Machacek said. In his annual State of the Union speech Tuesday, Bush also appealed for a 20-percent cut in US gasoline use by 2017, a move the White House said would slash vehicle emissions partly blamed for global warming. The US Department of Energy (DoE) had said on Wednesday that stocks of distillate products, such as heating oil and diesel fuel, increased 700,000 barrels to 142.6 million in the week ended January 19. That confounded analysts' consensus forecasts for a decline of 250,000 barrels. Stockpiles are however expected to show a decline in next week's report after US temperatures fell in recent days. "The market is basically balanced right now and is going to trade within a range of 50 and 55 dollars," Fimat analyst Mike Fitzpatrick said. "So there is no reason to be short below 50 or long above 55," he said, referring to speculative trading positions.
earlier related report In London, the price of Brent North Sea crude for March delivery slid nine cents to 55.34 dollars per barrel in electronic deals. New York's main oil futures contract, light sweet crude for delivery in March, also slipped nine cents to 55.28 dollars per barrel in floor trading. "It's very quiet after a stable close last night," said Bache Financial trader Tony Machacek of Thursday's price action. Crude futures had closed higher on Wednesday, extending Tuesday's sharp gains as chillier temperatures continued across the US. Swelling US energy stocks had pressured prices on Wednesday, following sharp gains made on Tuesday in reaction to plans by US President George W. Bush to double the country's emergency oil reserves. "The stocks influenced the market yesterday but the fact that strategic reserves will increase their storage is a more important issue for the market at the moment," Machacek added. Bush had called on Tuesday for a doubling of US emergency oil reserves by 2027 in his annual State of the Union speech. Bush also appealed for a 20-percent cut in US gasoline use by 2017, a move the White House said would lead to steep cuts in emissions partly blamed for global warming. Crude prices have staged a strong rally since falling beneath 50 dollars per barrel last week amid mild northern hemisphere winter weather. But as colder temperatures have gripped Europe and the United States, oil prices have risen this week beyond 55 dollars per barrel. Prices had rocketed Tuesday "due to a combination of seasonally cold weather in the US and Europe, expectations for distillate stockdraws ... and the announcement that crude purchases for the US Strategic Petroleum Reserve will take place this spring", Carey added. The US Department of Energy (DoE) had said on Wednesday that US stocks of distillate products, such as heating oil and diesel fuel, increased 700,000 barrels to 142.6 million in the week ended January 19. That confounded analysts' consensus forecasts for a decline of 250,000 barrels. Stockpiles are however expected to show a decline in next week's report after temperatures in the US fell in recent days.
earlier related report In London, the price of Brent North Sea crude for March delivery added 23 cents to 55.66 dollars per barrel in electronic trading. New York's main oil futures contract, light sweet crude for delivery in March, gained 27 cents to 55.64 dollars per barrel in electronic deals before the official opening of the market. "It's very quiet after a stable close last night," said Bache Financial trader Tony Machacek of Thursday's price action. Crude futures had closed higher on Wednesday, extending Tuesday's sharp gains as chillier temperatures continued across the US. Swelling US energy stocks had pressured prices on Wednesday, following sharp gains made on Tuesday in reaction to plans by US President George W. Bush to double the country's emergency oil reserves. "The stocks influenced the market yesterday but the fact that strategic reserves will increase their storage is a more important issue for the market at the moment," Machacek added. Bush had called on Tuesday for a doubling of US emergency oil reserves by 2027 in his annual State of the Union speech. Bush also appealed for a 20-percent cut in US gasoline use by 2017, a move the White House said would lead to steep cuts in emissions partly blamed for global warming. "Any of these proposals could affect our long-term price outlook if they progress -- but that is a big, big if," said Calyon oil analyst Mike Carey. Prices had rocketed Tuesday "due to a combination of seasonally cold weather in the US and Europe, expectations for distillate stockdraws ... and the announcement that crude purchases for the US Strategic Petroleum Reserve will take place this spring", Carey added. The US Department of Energy (DoE) had said on Wednesday that US stocks of distillate products, such as heating oil and diesel fuel, increased 700,000 barrels to 142.6 million in the week ended January 19. That confounded analysts' consensus forecasts for a decline of 250,000 barrels. "Although the weather in the US has been getting colder and more seasonal, distillate demand has not significantly picked up yet," Carey noted. Stockpiles are however expected to show a decline in next week's report after temperatures in the US fell in recent days.
earlier related report New York's main oil futures contract, light sweet crude for delivery in March, lost 84 cents to 54.20 dollars per barrel in floor trading. In London, the price of Brent North Sea crude for March delivery shed 61 cents to 54.49 dollars per barrel in electronic deals. The US Department of Energy (DoE) revealed Wednesday in a market update that levels of distillate products, such as heating oil and diesel fuel, increased 700,000 barrels to 142.6 million in the week ended January 19. That confounded analysts' consensus forecasts for a decline of 250,000 barrels. Demand for heating oil across the US northeast was expected to increase this week as temperatures have fallen in recent days amid snow storms in some areas. The DoE added that crude oil reserves rose 700,000 barrels to 322.2 million barrels last week. The rise was notably less than expected as most oil traders had expected crude inventories to swell by 1.3 million barrels. And gasoline or petrol reserves surged 4.0 million barrrels to 220.8 million, against expectations of a rise of just 1.5 million barrels. Prior to the report, crude futures had also traded in negative territory on profit-taking after Tuesday's bumper gains that were sparked partly by colder US temperatures, dealers said. "Crude oil futures surged higher yesterday on news that the US plans to build up its emergency crude reserves amid a background of colder weather in the US," said Michael Davies, an analyst with the Sucden brokerage in London. On Tuesday, prices had soared almost eight percent in New York to hit 55.15 dollars. London Brent crude meanwhile jumped nearly five percent to reach 55.18 dollars per barrel. US President George W. Bush had meanwhile called Tuesday for Americans to cut their dependence on gasoline. In his annual State of the Union speech, Bush called for a 20-percent cut in US gasoline use by 2017, a move the White House said would lead to steep cuts in emissions partly blamed for global warming. Bush also called for a doubling of US emergency oil reserves by 2027.
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Heat Mining All The Rage As Next US Energy Source
Boston MA (SPX) Jan 26, 2007A comprehensive new MIT-led study of the potential for geothermal energy within the United States has found that mining the huge amounts of heat that reside as stored thermal energy in the Earth's hard rock crust could supply a substantial portion of the electricity the United States will need in the future, probably at competitive prices and with minimal environmental impact. |
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