Crude Oil Little Changed Near Three-Month Low as Shipments Rise

Articles: Crude Oil Little Changed Near Three-Month Low as Shipments Rise

Posted by admin on Wednesday, June 30, 2004 - 12:05 AM

Crude oil in New York was little changed after falling to a three-month low yesterday as increased OPEC production and the end of output disruptions in Norway and Iraq encouraged speculators to sell futures contracts.
The Organization of Petroleum Exporting Countries will raise production targets by 2 million barrels a day to 25.5 million barrels, starting Thursday. A report later today is expected to show U.S. crude oil stockpiles rose for a fifth straight week, boosting supplies already 7.5 percent higher than a year earlier. ``Unless those stocks are surprisingly bullish we're heading lower,'' said Steve Taylor, a trader with New West Petroleum Inc. in Sacramento, California. Crude oil for August delivery traded up 12 cents at $35.78 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 2:03 p.m. Sydney time. Yesterday, oil fell 58 cents, or 1.6 percent, to $35.66 a barrel, the lowest close for a contract closest to expiration since April 6. Oil futures were 22 percent higher than a year earlier after falling 16 percent from a record $42.45 on June 2. Crude oil prices have fallen 6 percent the past three sessions. In that time a strike in Norway, the world's third- largest oil exporter, ended and Iraq's oil exports from its Persian Gulf terminals were restored to 1.68 million barrels a day. ``As long as everything stays quiet and the oil continues to flow prices should move lower,'' said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. in New York. ``I'm looking for support at $33.50,'' Kilduff said. Technical Traders Oil fell as low as $33.30 on April 2. Technical traders seek to identify such support levels, which can trigger selling if they are breached. U.S. oil and gasoline prices rose to records last month amid concern the country's fuel supplies were not rising fast enough to meet demand during the summer motoring season. Gasoline demand traditionally peaks between the Memorial Day holiday in late May and the Labor Day holiday in early September. Oil prices fell this month after OPEC, which pumps a third of the world's oil, agreed to raise its daily production ceiling by 8.5 percent starting on July 1 to help lower prices. The ceiling may be raised a further 500,000 barrels in August if necessary. U.S. crude-oil inventories probably rose by 1 million barrels from 305.4 million last week, according to the median forecast from a Bloomberg survey of 13 analysts. Stockpiles in the week ended June 18 were 7.5 percent higher than a year earlier, having risen for 14 of the preceding 17 weeks. The U.S. Energy Department will publish its weekly petroleum report at 10:30 a.m. Washington time. Gasoline Supplies Gasoline futures have fallen 8 percent the past four sessions and may decline further this week in the absence of any surprise refinery shutdowns, New West's Taylor said. The Independence Day holiday July 5 may offer some support, though traders will quickly review gasoline demand after that, he said. If supplies look adequate, the market's focus will start shifting toward heating oil supplies for the winter. Gasoline supplies probably fell by 750,000 barrels from 205.1 million the week before, according to the median of forecasts. Inventories in the week ended June 18 were 1.5 percent lower than a year earlier. Gasoline for July delivery fell 2.05 cents, or 1.8 percent, to settle at $1.1243 a gallon in New York, the lowest since April 7. It was at $1.1255 a gallon in after-hours trading. The more actively traded August contract rose 0.26 cent to $1.1225 a gallon. Gasoline futures have declined 24 percent from a record $1.47 reached on May 20. Prices were up 33 percent from a year earlier. Hedge-fund managers and other large speculators have trimmed their bets on higher prices for crude oil futures, according to data from the U.S. Commodity Futures Trading Commission. Speculative long positions, or futures and options bought, in Nymex crude oil outnumbered shorts by 65,957 contracts in the week ended June 22, down 47 percent over the previous four weeks, the commission said Friday. Net-long positions reached a seven-month low of 65,285 the previous week.

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