CPR: U.S. oil blasts higher as stocks shrink

greenspun.com : LUSENET : TB2K spinoff uncensored : One Thread

U.S. oil blasts higher as stocks shrink

By Gene Ramos

NEW YORK, Oct 10 (Reuters) - U.S. crude oil prices jumped for the third straight day Tuesday, surging late on news that the nation's pre-winter stock levels had taken another dramatic downturn.

Crude oil prices rocketed 68 cents to $33.86 a barrel in after hours ACCESS trade after new figures from the American Petroleum Institute (API) showed that stocks for all main categories of petroleum fell last week -- and especially in crude oil and distillate.

November futures on the New York Mercantile Exchange had already shot up more than $1.30 to $33.18 a barrel in regular hours on worries that violence between the Israelis and Palestinians could grow into a larger conflict and hit the region's crucial oil supplies.

From Friday prices have risen $3, slashing losses suffered when the U.S. government ordered a release of 30 million barrels from the Strategic Petroleum Reserve (SPR) to try and stop a heating oil supply crunch this winter.

Analysts have warned that the SPR release -- which initially cut crude prices some seven dollars from decade-highs near $38 -- has done little to improve availability of heating oil in the key U.S. northeast consumption centre.

Fears deepened after the API figures showed that crude stocks fell some 3.9 million barrels to 284 million in the week ended October 6, while inventories of distillate -- including heating oil -- slid 3.3 million barrels to 113 million.

Heating oil supplies in the Northeast again failed to rise last week to languish at just half last year's levels according to Tuesday's API report, just as an early blast of cold weather has taken U.S. northeast temperatures well below seasonal norms this weeks.

"The entire energy complex is severely constrained in its ability to deliver crude and products, leaving the system extremely vulnerable to potential price spikes and higher price volatility in both crude and products," said Goldman Sachs in a report.

In the Middle East, oil traders were concerned that violence between Israelis and Palestinians, which went on its 13th day on Tuesday, could draw Arab oil producing countries into the fray and lead to a disruption of oil supply from the region, the major source of oil for the industrialized West.

On Tuesday, U.S. Defense Secretary William Cohen said the crisis could threaten to suck in other countries if it was not defused quickly.

"There is a danger that if this goes unchecked we could see a much wider conflict with many more nations involved, and that would be devastating for all concerned," Cohen told repoters in England.

Late Monday, Saudi Arabia warned that it and other Arab states would not stand idly by if Israeli Prime Minister Ehud Barak acted against Lebanon and Syria.

By Tuesday, however, a source familiar with the kingdom's thinking said Saudi Arabia will not consider the option of holding back oil supplies to the West to protest Israeli use of force in the Middle East.

"This is not even being talked about. It is not being considered. It is out of the question," the source told Reuters, adding that it was no longer politically and economically viable for the kingdom or other Arab petroleum producers to impose an embargo on oil sales.

In the share markets, Big Oil shares posted hefty gains between $1 and $2 amid rising oil prices.

Cashing in on red-hotoil and gas prices, the energy industry is headed toward the best third-quarter earnings in corporate America, with profits for the major oil companies expected to double from the period last year.

On the New York Stock Exchange (NYSE), Chevron Corp. traded 1-3/16 higher at 87-3/16, Exxon Mobil Corp jumped 1-15/16 to $93-1/4 and Texaco Inc gained 1-11/16 at 54-3/4.


-- buddy/cpr (a_man_of_manny@faces.com), October 11, 2000



-- hmmmm (a@a.com), October 11, 2000.

Thanks for the article, but it was already posted eight threads before this one.

U.S. oil prices higher as stocks shrink


-- (two@double.duplicate), October 11, 2000.

old story.......TRY TODAY'S:


Wednesday October 11 4:08 PM ET
Oil Ends Flat As Stock Data Gains Erased

LONDON (Reuters) - Oil prices ended flat on Wednesday, handing back early gains on falling U.S. fuel stockpiles and forecasts of more cold spells heading to North America.

Tensions in the Middle East, where intense diplomatic efforts are under way to end Israeli-Palestinian violence and rescue the peace process, are also helping keep prices strong.

International benchmark Brent crude futures for November delivery ended unchanged at $31.85 a barrel after a rollercoaster session.

U.S. light crude traded just three cents lower at $33.15.

Weather forecasters Weather Services Corp said on Tuesday that the U.S. Northeast, already hit by a cold spell that has put early strains on home heating supplies, is set to take two more chilly blasts next week.

But the main driving force behind the sharp price gains was a fall in U.S. crude and product stocks.

Weekly inventory data from the American Petroleum Institute (API) showed an across-the-board fall in U.S. crude and refined products stocks, with especially large declines for crude oil and middle distillates, which include key winter heating oil.

The API said national crude stocks were down by 3.9 million barrels in the week to October 6, while distillates dropped 3.3 million barrels and gasoline by 936,000 barrels.

The market had expected either a build or a slight draw.

Fears of possible shortfalls in U.S. fuel supplies this winter have kept oil above $30 over the last few months. Some analysts expect prices to stay at that level for the remainder of the year.

The overheated market has brushed aside a series of output hikes unleashed by the Organization of the Petroleum Exporting Countries (OPEC (news - web sites)) which have failed to knock down prices.

Algerian Energy and Mining Minister Chakib Khelil said on Wednesday OPEC will lift output by 500,000 barrels per day (bpd) under its price band mechanism before the cartel's November 12 meeting if prices stay above a $28 threshold.

Under OPEC's informal price band mechanism, if the cartel's crude basket price stays above $28 for 20 working days or below $22 for 10 working days, crude output would be adjusted by 500,000 bpd either way in a bid to stabilize prices.

While dealers brace for the peak demand winter months in the Northern Hemisphere, they monitor developments in the unpredictable Middle East, fearing unrest could disrupt oil supplies.

Blazing prices are set against the backdrop of international efforts to end clashes in the Middle East, which have killed at least 90 people, mostly Palestinians and Israeli Arabs.

U.N. Secretary-General Kofi Annan shuttled between Israeli and Palestinian leaders on Wednesday, but reported no agreement on how to end two weeks of bloodshed as fresh violence killed two Palestinian youths.

Officials on each side blamed each other for a deadlock over Palestinian demands for an international inquiry into clashes that have killed at least 92 people, all but five of them Arabs.

In the latest violence, Israeli troops shot dead a 17-year-old Palestinian in the West Bank on Wednesday and an 18-year-old was also killed near an Israeli army post in Gaza.

Despite the headlines, traders remained focused on the nuts and bolts of the oil market.

``It is easy to confuse headline action with cause and effect -- a large part of the recent gains has been due to the surge in heating oil prices because of cooler weather in Europe and the U.S.,'' said GNI Research in its daily report.

-- cpr (buytexas@swbell.net), October 11, 2000.

buddy is a bold moron, just like creep

-- (too@much.bold), October 12, 2000.


Buddy is not CPR.

I should know.

Why are you so freaked out about oil anyway? Afraid the world's gonna end? I thought all good doomers had a stash of gasoline anyway.

-- Buddy (buddydc@go.com), October 12, 2000.

Why are you so freaked out about oil anyway? Afraid the world's gonna end? I thought all good doomers had a stash of gasoline anyway.

With U.S. household indebtedness as a percentage of income at record levels and an overvalued stock market, the next recession--whenever it happens--could be a deep one. Get out of debt. If you're in the stock market, consider putting some of that money in T-bills.

Oil over $30 per barrel increases the chances that the next recesion will happen sooner rather than later.

Storing gasoline at home isn't safe, by the way. My gasoline prep for Y2k was filling up the tank on December 30.

-- Get (out@of.debt), October 12, 2000.

Moderation questions? read the FAQ