|
|
Featured Articles
Sep 06, 2010
Oil Rises From Seven-Week Low on Forecast for More U.S. Storms Feb 08, 2010
By Margot Habiby
Feb. 8 (Bloomberg) -- Oil rose for the first time in four days as the U.S. mid-Atlantic region braced for a new winter storm in coming days and dug out from a weekend blizzard.
Crude rebounded from a seven-week low after the National Weather Service issued storm warnings from Utah to New Jersey and advisories for below-normal temperatures in the East that would increase demand for heating fuel. The weekend storm left as much as 40 inches of snow and shut government offices today in Washington.
“The cold weather is persisting here and it’s not relenting,” said John Kilduff, a partner at Round Earth Capital, a New York-based hedge fund that focuses on food and energy commodities.
Crude oil for March delivery rose 70 cents, or 1 percent, to settle at $71.89 a barrel on the New York Mercantile Exchange. Oil closed at $71.19 on Feb. 5, the lowest price since Dec. 15. Futures have gained 79 percent in the past year.
Oil futures reached a record daily volume of 1.12 million contracts on the exchange on Feb. 5, 94 percent above the average of the past three months. Oil volume in electronic trading on the Nymex was 552,342 contracts as of 2:55 p.m. in New York. Open interest was 1.31 million contracts.
The National Weather Service is forecasting temperatures will be below normal for the next six to 10 days along the East Coast, from Florida to Maine.
Below-Normal Temperatures
“A very wintry and unseasonably cold week remains on tap from the southern plains and Midwest to the Northeast and mid- Atlantic,” said Jim Rouiller, a senior energy meteorologist at Planalytics Inc., in Wayne, Pennsylvania. The new storm may reach “crippling proportions from Washington and Philadelphia to New York City and possibly Boston by Wednesday.”
Washington will be 10 degrees Fahrenheit (minus 12 degrees Celsius) below normal by Feb. 14, according to a forecast by MDA Federal Inc.’s EarthSat Energy Weather. New York temperatures will be 8 degrees below average on Feb. 13, it said.
Heating oil for March delivery gained 1.07 cents, or 0.6 percent, to $1.8855 a gallon. Four-fifths of U.S. heating-oil consumption comes from the Northeast.
U.S. stockpiles of distillate fuel, a category that includes heating oil and diesel, probably fell last week as temperatures dropped, a Bloomberg News survey of analysts showed before an Energy Department report this week.
Distillate supplies declined 1.5 million barrels in the week ended Feb. 5 from 156.5 million the prior week, according to the median of 10 estimates by analysts.
Oil Supplies
Inventories of crude oil probably increased 1.5 million barrels from the previous week’s 329 million, according to the survey.
The Energy Department report, scheduled for release at 10:30 a.m. Washington time on Feb. 10, and an inventory report by the industry-funded American Petroleum Institute set for 4:30 p.m. tomorrow, may face delays because of the weekend storm in Washington, the groups said.
Gasoline demand over the four weeks ended Jan. 29 fell 0.5 percent to 8.64 million barrels a day, the lowest level since 2004, the Energy Department reported last week. Total fuel consumption over the period averaged 18.8 million barrels a day, down 2 percent from a year earlier.
“There are currently no signs that underlying demand is picking up,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “It appears to be only a question of time when the oil price will drop below the $70 mark again.”
Oil Below $70
Oil on the Nymex fell 7.8 percent in the previous three trading sessions. It touched $69.50 in intraday trading Feb. 5, when futures dipped below the 200-day moving average, a key technical support level. Oil last dropped below the 200-day average in September 2008, and stayed under it until May 2009.
Iran’s OPEC governor, Mohammad Ali Khatibi, said today that world oil supply is sufficient to meet demand during the first half of this year. The Organization of Petroleum Exporting Countries, responsible for 40 percent of the world’s crude production, meets on March 17 to consider whether to alter output targets for the first time since 2008.
Oil also gained today after Nigerian militants said they disabled a pipeline operated by Royal Dutch Shell Plc.
An overnight attack at Obunoma, south of the Nigerian oil hub of Port Harcourt, cut supplies from the Nembe Creek, Soku, Belema and Ekulama fields, the Joint Revolutionary Council said in an e-mailed statement yesterday. Shell hasn’t received any report of the attack, the company’s Nigeria spokesman, Precious Okolobo, said yesterday.
Brent crude for March settlement rose 52 cents, or 0.7 percent, to $70.11 a barrel on the ICE Futures Europe exchange in London. Brent was $1.85 cheaper than Nymex oil futures, the widest spread between the March contracts since February 2009.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
[back] |
Loading...
| 3106 |
N/A |
+54 |
N/A |
|
