Sam Fletcher
Senior Writer
HOUSTON, Feb. 14 -- After falling during the previous trading session in anticipation of a build in US inventories, crude futures prices partially rebounded Feb. 13 when the stock gain proved to be less than expected.
The Energy Information Administration reported commercial US inventories of crude rose 1.1 million bbl to 301.1 million bbl in the week ended Feb. 8, but analysts were expecting a 2.5 million bbl increase. Gasoline stocks gained 1.7 million bbl to 229.2 million bbl during the same period, up from a consensus of 1.4 million bbl. Distillate fuel inventories decreased by 100,000 bbl to 127 million bbl, vs. the consensus of a 1.3 million bbl draw (OGJ Online Feb. 13, 2008).
"Crude found strength from strong Japanese gross domestic product growth yesterday, while weather-related supply shutdowns in Mexico and Australia should keep prices strong today," said analysts in the Houston office of Raymond James & Associates Inc.
Olivier Jakob at Petromatrix, Zug, Switzerland, said crude futures on the New York market are technically "still trying to move into a wider trading range ($85-100/bbl rather than $85-95/bbl) but is still lacking a true fundamental story to justify trading towards historic highs. Given the better support from outside markets (equities), the short sellers are more likely to wait the test of $95 /bbl before trading on fundamentals."
Paul Horsnell at Barclays Capital Inc., London, said, "Our short and medium-term view continues to look for a push-up in prices back above $100/bbl after a period of sideways trading. We are getting a little more bullish on the timing of the start of the sustainable move up. We had thought that this might not be until well into the second or third quarter, having been delayed by the continuation of economic gloom and an over-concentration on US economic prospects. However, it now appears to us that the downside is currently even more visibly protected than before, and the resilience of prices in response to the flow of economic data suggests that the path of least resistance may be upwards sooner than we had previously thought."
In other news, a US district court in New York City extended a freeze on $315 million of US-based funds belonging to Petroleos de Venezuela SA. That freeze was requested by ExxonMobil Corp. as possible compensation for Venezuela's seizure of ExxonMobil's heavy oil projects in that country. ExxonMobil earlier won temporary rulings blocking the sale or transfer of some $12 billion in PDVSA assets in the UK, the Netherlands, and Netherlands Antilles. A hearing on the UK court decision is scheduled Feb. 22.
Energy prices
The March crude contract of benchmark US sweet, light crudes regained 49¢ to $93.27/bbl Feb. 13 on the New York Mercantile Exchange. The April contract increased 55¢ to $93.41/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 48¢ to $93.27/bbl. Heating oil for March delivery recouped 2.45¢ to $2.62/gal on NYMEX. The March contract for reformulated blend stock for oxygenate blending climbed 2.19¢ to $2.39/gal.
The March natural gas contract price continued to fall, down 4.8¢ to $8.39/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., lost 8.5¢ to $8.35/MMbtu.
In London, the March IPE contract for North Sea Brent increased 46¢ to $93.32/bbl. The new front-month March contract for gas oil gained $4.50 to $833.25/tonne.
The average price for OPEC's' basket of 12 benchmark crudes slipped by 16¢ to $89.65/bbl on Feb. 13.
Contact Sam Fletcher at [email protected]