Crude Oil Rise Slightly
Filed Under (World News) by Webmaster on 11-02-2009
Tagged Under : crude oil, OPEC, rise
Bloomberg reported Oil rose on speculation that OPEC production cuts are starting to reduce the oversupply of crude caused by weakening demand.
The industry-funded American Petroleum Institute yesterday said U.S. crude supplies unexpectedly declined 2 million barrels to 344.3 million last week. OPEC has complied with about 80 percent of production cuts announced through to December, the group’s secretary general said this week. An Energy Department report today is expected to show the smallest increase in stocks in four weeks, a Bloomberg survey showed.
“We can already see the beginning of the effects of the cuts,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “I don’t expect a draw in inventories, but I also don’t expect such a big increase as we have had in the past two weeks.”
Crude oil for March delivery rose as much as 89 cents, or 2.4 percent, to $38.44 a barrel on the New York Mercantile Exchange. It was at $37.96 a barrel at 9:27 a.m. London time.
Yesterday, crude oil fell $2.01 to $37.55 a barrel in New York, the biggest drop since Jan. 27. Oil is down 15 percent this year and has declined 60 percent from a year ago.
The Organization of Petroleum Exporting Countries pumped 29 million barrels a day of crude in January, 950,000 barrels a day less than in December, as the organization implemented announced supply cuts, the International Energy Agency said in its monthly report today.
Saudi Arabia, OPEC’s biggest producer, cut by 300,000 barrels a day last month to 8.1 million barrels a day, according to the agency. OPEC has complied with about 80 percent of its 4.2 million barrels a day production cuts and has 900,000 barrels left to cut, Secretary-General Abdalla el-Badri said earlier this week. That’s left the group with about 8 million barrels of shut-in capacity.
The IEA cut its global oil demand forecast for 2009, projecting consumption will decline by 1 million barrels a day as the worldwide recession deepens, the biggest drop since 1982.
The adviser to 28 nations trimmed its 2009 forecast by 570,000 barrels to 84.7 million a day because of a weaker economic outlook from the International Monetary Fund. The agency warned slipping investment in capacity may cause a price rebound that “could again destabilize the global economy.”
The API published its weekly report on oil inventories at 4:30 p.m. in Washington yesterday. An Energy Department report today is expected to show an increase of 2.75 million barrels, according to a Bloomberg survey.
Energy Department figures, to be released at 10:30 a.m. in Washington today, may show that crude-oil stockpiles increased 2.75 million barrels in the week ended Feb. 6 from 346.1 million the week before, according to the median of 14 analyst estimates. It would be the 18th gain in 20 weeks. All of the analysts said supplies rose.
[...] Oil prices lingered near $36 a barrel Thursday in Asia, following a steep fall overnight, as surging crude inventories in the U.S. stoked investor concern that consumer demand will continue to fall amid a deep recession. Crude oil was last traded at $38 on February 11. [...]