Oil Rises to Six-Month High as OPEC Predicts Demand Recovery

May 28 (Bloomberg) -- Crude oil rose above $64 a barrel for the first time in six months after OPEC decided today to leave production quotas unchanged on speculation demand will rise as the global economy recovers.

Saudi Arabian Oil Minister Ali al-Naimi said that the group opted not to alter its output targets because “prices are good, the market is in good shape.” Oil should stay in a $60 to $70 range for the rest of the year, OPEC Secretary General Abdalla el-Badri said. The gain accelerated after a report showed that U.S. oil supplies fell the most since September.

“The outcome, no change in OPEC quotas, was expected, but the surprise was Saudi Arabia being very explicit about a price objective for the first time since the price band mechanism in the early part of this decade,” said Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York.

Crude oil for July delivery rose $1.11, or 1.8 percent, to $64.56 a barrel at 11:16 a.m. on the New York Mercantile Exchange. Futures reached $64.99, the highest since Nov. 10. Prices are up 45 percent this year.

The Organization of Petroleum Exporting Countries sought to maintain a benchmark price, comprised of seven oil grades, between $22 and $28 a barrel beginning in 2000. The group abandoned the price band in January 2005.

“They have now set economic parameters within which the market will now function, on the upside at least,” Eagles said.

Saudi Arabia’s al-Naimi forecast that oil may rise to $75 a barrel by this year’s third or fourth quarter. The group’s next meeting will be on Sept. 9, he said.

Maintain Discipline

“I don’t think there was any way they could justify cutting again at $60-plus crude,” said Mike Wittner, head of oil research at Societe Generale SA in London. “If they can maintain discipline and limit the production creep that comes with higher prices, stocks should start to come down.”

Other OPEC ministers said the group will work toward finishing previously announced reductions. OPEC has yet to complete output cuts totaling 4.2 million barrels a day that members agreed to late last year.

The production ceiling is 24.845 million barrels a day for 11 of its members. They pumped 25.812 million barrels a day in April, a May 13 report from the group showed. Iraq has no quota.

“Given the recent rally to above $60 a barrel and a global economy in recession, it would not have been possible to justify further cuts,” said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London.

Prices also increased after a government report showed a larger-than-expected gain in orders for U.S. durable goods, adding to evidence that that recession is easing. The 1.9 percent increase reported by the Commerce Department today in Washington was the largest since December 2007. Economists forecast a 0.5 percent gain in a Bloomberg News survey.

U.S. Inventories

U.S. crude oil inventories declined 5.41 million barrels to 363.1 million last week, according to the Energy Department. It was the biggest drop since September, when platforms, ports and refineries along the Gulf of Mexico were shut because of hurricanes. A 150,000-barrel decline was forecast, according to the median of 12 analyst responses in a Bloomberg News survey.

The Energy Department released its supply report today at 11 a.m. in Washington, a day late because of the Memorial Day holiday.

The American Petroleum Institute said yesterday that U.S. oil supplies dropped 2.82 million barrels to 364.7 million in the week ended May 22.

API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Brent crude for July settlement gained $1.53, or 2.5 percent, to $64.03 a barrel on London’s ICE Futures Europe exchange. Futures touched $64.17, the highest since Nov. 5.

Oil at $62; could hit $75 says Saudi Minister

Crude oil futures hold near 6-month high after the Saudi Oil Minister says it could hit $75, ahead of OPEC's meeting.
By Catherine Clifford, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) -- Oil hovered on either side of $63 a barrel Wednesday ahead of the OPEC meeting and after the Saudi Oil Minister said the global economy can handle oil prices between $75 and $80.

Light sweet crude for July delivery traded up 10 cents to $62.55 a barrel, after reaching as high as $63.45 earlier in the session.

Oil settled at $62.45 a barrel Tuesday, which was the highest settle price since Nov. 5, and Tuesday's close was the fourth day in a row that oil has settled above $60.

Wednesday, the Saudi Oil Minister, Ali al-Naimi, said that the global economy was capable of managing with oil as high as $75 to $80 a barrel, according to reports from Reuters.

Oil has been very volatile in the past year. Oil prices topped out at $147 a barrel last summer before plunging below $34 a barrel in December. Then oil doubled back to pop up over $60 a barrel since the start of the year.

"The price rise is a function of optimism that better things are coming in the future," Naimi told reporters in Vienna, according to reports from Reuters. "We see offshoots of recovery." Comments from the head of oil juggernaut Saudi Arabia tend to drive the price of oil.

Al-Naimi hinted at higher prices in the future, but for now, the Organization of Petroleum Exporting Countries was expected to leave production quotas unchanged. The cartel - whose members produce about 40% of the world's crude - meet Thursday in Vienna to discuss production levels. When they cut production levels, that props up oil prices by reducing supply.

Starting late last year, OPEC announced reductions of 4.2 million barrels a day, and member nations have largely been complying with the production cut backs.

But with oil prices already on the rise and a tender global economy looking to stage a recovery, OPEC would be hard pressed to rationalize further production cuts.

Also Thursday, the government's weekly supply report is scheduled to be released, giving a snapshot of the levels of oil in the U.S. Typically, the Energy Information Administration's weekly supply report is posted Wednesday morning, but due to the Memorial Day holiday, the report comes out a day later this week.

Gas prices: As crude prices have crept up, so have gas prices. The pain at the pump has been getting steadily more severe for the last month. Retail gas prices have climbed for 29 consecutive days.

The national average price for a gallon of regular unleaded gasoline increased to $2.434, up 9 tenths of a cent from the previous day's price of $2.425 according to a daily survey by motorist group AAA.

In the last 29 days the average price of gas has jumped 38.6 cents or 18.8%. The average price of a gallon of gas is down $1.68 or 40.8% from the record high price of $4.114 that AAA reported on July 17, 2008. To top of page

Oil to ‘Correct’ Drop, Target $77: Technical Analysis

By Christian Schmollinger
May 26 (Bloomberg) -- Crude oil in New York may rise to $77 a barrel over the next several months as futures contracts “correct” the decline from a record $147.27 in July, according to technical analysis from MF Global.

Oil may first climb to $71.75 a barrel, the level reached on Nov. 4, P. A. Rajan, a Singapore-based technical analyst at MF Global, said in a telephone interview yesterday. Crude could reach $77, near the level equal to the so-called Fibonacci retracement of 38.2 percent of oil’s decline from the July record, or $76.28 a barrel.

The gain is part of a so-called correction, or the reverse of a climb or decline, under an Elliot Wave pattern. The wave principle is a theory developed by accountant Ralph Nelson Elliott during the Great Depression. He concluded that market swings, or waves, follow a predictable, five-stage structure of three steps forward, two steps back.

“This oil rally is a correction for the 2008 sell-off,” Rajan said. “We could be in the start of a multi month rally. It’s a larger wave corrective uptrend.”

Oil futures in New York plunged 77 percent from $147.27 a barrel to $33.87 on Dec. 19, the lowest settlement since Feb. 10, 2004. Since then, prices have climbed 80 percent to $61.02. Crude for July delivery was trading down 37 cents, or 0.6 percent, at $61.30 a barrel at 8:17 a.m. in Singapore.

Rajan ascertained the $77 a barrel level based on the ratio between numbers in the Fibonacci sequence. Sometimes known as the golden mean, the ratio is used to find support or resistance as prices retrace rallies or declines between previous highs and lows.

Market Tips: Oil is the New Gold

By: CNBC.com | 22 May 2009 | 07:31 AM ET
Global stocks seesawed Friday, but oil prices were on the increase. This week the energy stock reached fresh six-month highs. Experts tell CNBC oil is becoming the new gold.

The Fundamentals of Oil

The recent rise in crude oil prices seems to be independent of the fundamentals of the market, says Azlin Ahmad, editor at Argus Media Singapore.

Oil — The New "Gold"?

Oil is becoming the new "gold", remarks Paul Schulte, MD of Nomura International.

Link Between Dollar & Gold

The inverse relationship between the dollar and gold is returning, notes Sunil Kashyap, MD of Scotia Capital. He discusses gold's safe haven appeal.

Investor Spring Cleaning - A CNBC Special Report

This is Not a "Bimbo Rally"

This rally is absolutely, positively, unquestionably, fundamental, it is not due to some sort of moronic liquidity, believes Paul Schulte, MD of Nomura International.

No Sharp Selloff

A market pullback will be smaller than expected as many see this as a buying opportunity, says Andrew Sullivan, sales trader at MainFirst Securities.

Invest Selectively

Selective investment and a stable portfolio are key to investing, suggests Sean Fenton, director at Tribeca Investment Partners.

Bet on Alternative Investments

As the market is behaving like a "pendulum", Christian Nolting, regional head of portfolio management at Deutsche Bank Private Wealth Management recommends balancing one's portfolio by ramping up alternative investments and bonds. He shares his strategy in this installment of 'Protect Your Wealth'.

Fracing Trucks and Pulling Unit on the Franklin County Project (1)

Fracing Trucks and Pulling Unit on the Franklin County Project

Oil Rises Toward $62 as US Crude Supply Falls

By: Reuters | 20 May 2009 | 10:47 AM ET
The price of a barrel of oil rose toward $62 Wednesday following official government data that showed a wider-than-expected fall in crude stockpiles last week.

U.S. light, sweet crude [US@CL.1 61.47 1.37 (+2.28%)] rose, and London Brent crude [GB@IB.1 60.14 1.22 (+2.07%)] traded higher.

US commercial crude oil inventories fell 2.1 million barrels for the week ended May 15, compared to the previous week, according to the Energy Information Administration. That's wider than the 0.2-million-barrel draw expected by analysts surveyed by Reuters.

Total motor gasoline inventories fell 4.3 million barrels, compared to the 1.2 million barrel fall expected by analysts. And distillate fuel inventories rose 0.6 million barrels, while analysts had expected an increase of 1 million barrels.

Fire struck gasoline making units at two U.S. refineries this week, triggering a roughly 8 percent spike in U.S. gasoline futures that will likely filter through to retail pumps just as the summer driving season begins.

"It's all on the back of those refinery glitches and some Nigerian scuffle," said Rob Montefusco, an oil trader at Sucden Financial in London.

"All the economic data out this morning has been terrible, but if you strip it back, it's RBOB-led," Montefusco said.

Reformulated gasoline blendstock for oxygen blending, or RBOB, was trading at $1.8480 a gallon, up 2.39 percent on the day and its highest level since October 16, 2008.

Unrest in OPEC member Nigeria, Africa's top oil and gas exporter, also drove up prices this week.

Security forces clashed with militants on Tuesday near an oil flow station operated by Chevron in the western Niger Delta.

Italy's biggest oil and gas company ENI SpA on Wednesday declared force majeure for its Brass River export terminal in Nigeria, adding its output affected so far was 9,000 barrels per day.

Falling Stockpiles

Oil prices have been on an upward trend since mid-April on equity-led rallies. They have recovered from below $33 in December after a plunge from record highs above $147 in July.

On Tuesday after oil markets closed industry group the American Petroleum Institute (API) released data showing U.S. crude stocks fell by a much larger than expected 4.5 million barrels in the week to May 15.

Commodities markets have closely tracked the stock market in recent months as dealers seek signs of economic health.

Tokyo's Nikkei average was up 0.6 percent at the close, shrugging off data that showed Japan suffered a record contraction in the first quarter.

Oil data out of Tokyo, centre of the world's No. 2 economy, also showed gasoline inventories at their lowest level since September 2007 and kerosene stocks declining to a near three-year low in part due to strong sales.

The Algerian oil minister said the Organization of Petroleum Exporting Countries (OPEC), which has agreed to cut 4.2 million bpd of output since September to prop up prices, has no reason to cut output more when it next meets on May 28.

"If the price stays at this level ... I don't think there will be any reason to cut," said Algerian Energy and Mines Minister Chakib Khelil in Buenos Aires.

Oil hovers above $59 on signs recession easing

By PABLO GORONDI Associated Press Writer
Oil prices traded around $59 a barrel on Tuesday as investors booked profits on early gains, when sentiment was buoyed by a global stock rally and signs the U.S. recession is easing. Continued unrest in Nigeria's oil-rich south and a fire at a U.S. oil refinery also supported prices.

Benchmark crude for June delivery was up 2 cents to $59.05 a barrel by mid-afternoon in Europe in electronic trading on the New York Mercantile Exchange. Earlier in the session, prices peaked at $60.48. On Monday, the contract jumped $2.69 to settle at $59.03.

In London, Brent prices fell 14 cents to $58.33 a barrel on the ICE Futures exchange.

Investors on Monday cheered better-than-expected profit reports from home improvement chains Home Depot and Lowe's, an uptick in homebuilder sentiment and positive comments from analysts about U.S. banks - all of which suggested the U.S. economy is gradually emerging from a severe recession. The Dow Jones industrial average jumped 2.9 percent.

On Tuesday, stock indexes rose strongly in Asia and were generally up 1-2 percent in Europe.

While most analysts expect oil prices to increase over the next year as global economic growth recovers, some suspect the recent surge from below $35 a barrel in March may have gone too far, too fast.

"The move from $40 to $60 has happened faster than we thought it would," said Bob Doll, vice chairman of BlackRock, which manages $1.3 trillion of assets. "But a year from now oil prices should be modestly higher than where we are today."

The jump in prices for gasoline and other oil products shouldn't choke off a fledgling recovery in consumer demand since the fall from $147 a barrel in July helped free up extra spending cash, Doll said.

"We've got our eye on it, but we're not overly concerned," he said. "Oil versus a year ago is still down a whole bunch."

Vienna's JBC Energy said the unrest in Nigeria, where the Movement for the Emancipation of the Niger Delta (MEND) militant group threatened to cut off oil tankers' access to key export channels, was still a risk factor for oil prices.

"This would severely reduce the ability for companies to import or export crude oil and petroleum products," JBC said about Africa's biggest crude exporter.

Meanwhile, a fire at Sunoco Inc.'s Marcus Hook refinery in Pennsylvania - ranked 39th by total production out of the 150 U.S. operating refineries - was contained Monday, but the news helped boost gasoline futures.

In other Nymex trading, gasoline for June delivery rose 1.11 cents to $1.7692 a gallon and heating oil gained 1.32 cents to $1.4889 a gallon. Natural gas for June delivery fell 0.9 of a cent to $4.13 per 1,000 cubic feet.

Oil Rises on Nigerian Militant Threats, Sunoco Refinery Fire

May 18 (Bloomberg) -- Crude oil rose above $58 a barrel after a Nigerian militant group threatened to block waterways used for energy exports and as an explosion and fire at a Sunoco Inc. refinery “impacted” operations in the U.S. Northeast.

The Movement for the Emancipation of the Niger Delta said in an e-mailed statement that ships moving through the southern part of the nation would be traveling at their own risk. Sunoco, the largest refiner in the Northeast, said the incident at the Marcus Hook plant, located on the border of Pennsylvania and Delaware, took place late yesterday.

“The situation in Nigeria is becoming increasingly unsettled,” said John Kilduff, senior vice president of energy at MF Global in New York. “The problems at the Sunoco refinery, which is a major supplier of gasoline to New York Harbor, are also giving the market a boost.”

Crude oil for June delivery rose $1.61, or 2.9 percent, to $57.95 a barrel at 9:54 a.m. on the New York Mercantile Exchange. The contract climbed as much as $2.04, or 3.6 percent, to $58.38. Futures are up 30 percent this year.

The June Nymex oil contract expires tomorrow. The more- actively-traded July contract rose $1.66, or 2.9 percent, to $58.66 a barrel.

Gasoline for June delivery rose 5.01 cents, or 3 percent, to $1.7307 a gallon in New York. Futures touched $1.7485, the highest since Oct. 21.

Energy futures also climbed after U.S. equities increased on better-than-forecast earnings by Lowe’s Cos. and analysts recommended Bank of America Corp. The Standard & Poor’s 500 Index rose 1.3 percent to 893.99. The Dow Jones Industrial Average increased 1.3 percent to 8,376.80.

Niger Delta Unrest

Fighting in Nigeria has escalated since May 13 when the Nigerian militants said they responded to an army offensive by attacking military positions and hijacking a tanker.

MEND claimed responsibility yesterday for rupturing two pipelines supplying oil and natural gas from a Chevron Corp. facility to domestic refineries and power stations. The rebel group has threatened to blockade waterways in the southern region used for oil and gas exports.

Nigeria produces low-sulfur, or sweet, crude oil, prized by U.S. refiners because of the proportion of high-value gasoline and diesel it yields.

Angola, Africa’s second-biggest oil producer after Nigeria, will cut daily shipments, excluding the Gimboa grade, by 6.8 percent in July. BP Plc, Total SA, Chevron Corp., Exxon Mobil Corp. and other companies are scheduled to load an average of 1.7 million barrels a day in July, compared with June’s 1.83 million, according to loading programs released through today.

Marcus Hook

There were no injuries at Marcus Hook and all personnel have been accounted for, Thomas Golembeski, a company spokesman, said in an e-mail. The refinery can process 175,000 barrels of oil a day, according to data compiled by Bloomberg.

“The fire, which is located at the ethylene unit, is contained and under control,” said Golembeski. “The cause of the fire is being investigated. Right now, our main focus is on protecting the health and safety of our employees as well as the surrounding community.”

Ethylene is a petrochemical product that is used as a building block for plastics. It is derived from naphtha and liquid petroleum gas.

Sunoco will be “optimizing operations at Philadelphia and Eagle Point” refineries to make “every effort to meet customer demand,” said Golembeski.

The Philadelphia refinery has a capacity of 330,000 barrels a day and the Eagle Point plant in New Jersey can process 150,000 barrels of oil a day.

Brent crude for July settlement rose $1.84, or 3.3 percent, to $57.82 a barrel on London’s ICE Futures Europe exchange.

Oil steadies below $59/bbl, eyes equities, dollar

15 May 2009, 0935 hrs IST, REUTERS
SINGAPORE: Oil prices paused below $59 on Friday as investors weighed stronger equities
, a steady dollar and a gloomy demand forecast by the
International Energy Agency.

Crude prices were just a notch higher from last week's close, after moving in lockstep with the stock market and rising against a bearish report by the IEA a day earlier.

US crude for June delivery inched up 9 cents to $58.71 a barrel at 0246 GMT, while London Brent for July delivery rose 12 cents to $58.71 in its first session of trade as the new front-month contract.

"Equities and currency are most important. The $60 price level is also very important," Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd, said.

US oil prices breached $60 a barrel during intraday trading on Tuesday but settled below $59 after the US Department of Energy slashed its 2009 oil demand forecast.

Oil prices have been tracking equities markets in recent months as traders look to stocks for signs of an economic recovery that could lift ailing world fuel demand.

Tokyo's Nikkei average was up 1.66 percent by the midday trading break after Wall Street closed firmer on Thursday, while the dollar was steady against a basket of major currencies.

Paris-based IEA, an adviser to 28 industrialized nations on energy policy, forecast a day earlier that world oil demand this year would fall the most since 1981.

IEA said the rise in oil prices to a six-month high above $60 this week was due to sentiment rather than fundamentals.

The US Energy Information Administration and OPEC also cut their forecasts for energy demand in recent days.

The Organization of the Petroleum Exporting Countries (OPEC), which has announced 4.2 million bpd of production cuts since September in a bid to tighten the market, also pumped more oil last month than in March, the IEA said.

OPEC members' compliance with production quotas fell to 78 percent in April from 83 percent a month earlier.

Traders will take cues from more economic indicators out of the United States due later in the day, as well as renewed unrest in Nigeria, Africa's biggest oil producer.

Nigerian militants have hijacked two cargo ships in the Niger Delta and given oil companies until Saturday to evacuate staff, warning they would attack helicopters and planes after the deadline, after heavy clashes with the military.

Economic data expected later include US April consumer price index, the Reuters/University of Michigan survey of May consumer sentiment, the US ECRI weekly index of economic activity, as well as euro zone flash first-quarter GDP.

The Rig

Oil rises towards $60 on US stockdraw, eyes recovery

13 May 2009, 0937 hrs IST, REUTERS
SINGAPORE: Oil extended gains towards $60 a barrel on Wednesday, after hitting a six-month high the previous day, as US weekly inventory data
showed a drawdown versus forecasts for a stock build, boosting hopes for demand recovery in the world's top energy user.

Oil was also buoyed by a weaker US dollar, which slid to a four-month low against a basket of currencies as growing optimism about the global economy boosted investors' risk appetite and curbed demand for the greenback as a safe haven. The market will await the US Energy Information Administration's
(EIA) weekly report at 1430 GMT to confirm the surprise fall in crude stocks.

April retail sales data and March business inventory figures due later in the day would provide more clues on the health of the US economy. By 0240 GMT, US crude for June delivery was up 95 cents at $59.80 a barrel. It settled 35 cents higher at $58.85 a barrel on Tuesday, off an earlier peak of $60.08, its highest level since November. London Brent crude rose $1.10 to $59.04.

"Sentiment has been pretty bullish for the better part of the last month or two, and we believe crude will find $60 as the floor and trend higher in the next few weeks," said Peter McGuire, managing director of Commodity Warrants Australia. "Also, we're moving into the period of higher demand in the northern hemisphere and hurricane season, which could affect supplies from the US Gulf, so we expect a range of $61-$62 pretty soon."

The American Petroleum Institute (API) said on Tuesday that US crude inventories fell 3.1 million barrels to 370.7 million barrels last week, against a forecast of a 1.4 million barrel increase in a Reuters poll of analysts. Possibly hinting that consumer confidence is returning, US April retail sales, out at 1230 GMT, are expected to remain unchanged from from a 1.2 per cent decline in March, a Reuters poll of economists showed.

Excluding automobiles, sales are seen up 0.2 per cent compared with a 0.9 per cent slide the prior month. Oil has plunged from a record high above $147 a barrel hit last July, but a rally in stock markets over the last few months has helped lift crude up almost 80 per cent from a January low of $32.70 a barrel.

The Organization of Petroleum Exporting Countries (OPEC) is unlikely to cut its oil output target at its meeting later this month, a source close to the group's president and a second OPEC delegate said on Tuesday. The producer cartel is also due to release its monthly report later at 1000 GMT.

Kansas Work

Oil Rises Above $60 to a 6-Month High as Chinese Imports Surge

May 12 (Bloomberg) -- Oil rose above $60 a barrel for the first time in six months after China, the world’s second biggest energy-consuming country, increased crude imports by 14 percent in April.

Deliveries reached 16.17 million metric tons last month, or 3.9 million barrels a day, a statement on the Chinese customs department’s Web site showed today. The dollar fell to the lowest level against the euro since March on signs the worst of the recession may be over. A weaker U.S. currency bolsters demand for commodities as an alternative investment.

“The Chinese numbers are pretty stunning,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “The Chinese are looking at prices now as a good value and they are worried about all of the dollar assets they have. They are buying everything, any raw material they can get their hands on.”

Crude oil for June delivery rose $1.27, or 2.2 percent, to $59.77 a barrel at 9:01 a.m. on the New York Mercantile Exchange. Futures touched $60.08, the highest since Nov. 11.

China will increase imports of commodities including oil and boost inventories of strategic raw materials as prices are at their lowest in seven years, the nation’s economic planner said in March.

The dollar declined 0.6 percent to $1.366 per euro, from $1.3582 yesterday. It touched $1.3707, the weakest level since March 23.

Oil prices are up 34 percent this year, supported by record production cuts announced by the Organization of Petroleum Exporting Countries. OPEC ministers are scheduled to discuss output levels at a May 28 gathering in Vienna.

‘Too Early’

“It’s too early to say” what decision the group will make at its next meeting, Qatari Oil Minister Abdullah bin Hamad Al- Attiyah said at the opening of the South Hook liquefied natural gas terminal in Wales.

U.S. crude stockpiles remain at the highest since 1990 and probably gained 1 million barrels last week, according to the median of 13 responses in a Bloomberg News survey. Supplies rose to 375.3 million barrels in the week ended May 1, the highest since September 1990, the Energy Department said.

Brent crude oil for June settlement rose $1.13, or 2 percent, to $58.61 a barrel on London’s ICE Futures Europe exchange. The contract climbed as much as $1.43, or 2.5 percent, to $58.91, the highest since Nov. 10.

Oil steady at $58

By Fayen Wong
Reuters
First Posted 10:10:00 05/11/2009
PERTH--Oil steadied at near a 6-month high of above $58 a barrel on Monday, keeping most of the previous session's gains, on hopes that energy demand would rebound alongside a global economy recovery.

Oil rose more than 3 percent on Friday to touch a near six-month high as economic data showed fewer-than-expected jobs were lost in April and stress test results lifted some uncertainty over the health of major American banks.

US crude slipped 18 cents to $58.45 a barrel by 0045 GMT. The contract rose $1.92 to settle at $58.63 on Friday.

London Brent crude fell 10 cents to $58.04.

"Oil prices are driven by perceptions that the economic outlook is less pessimistic that previously thought. But the growth numbers we could be seeing from developed economies may not justify such price levels," said David Moore, a commodities strategist at Commonwealth Bank of Australia.

Traders will be eyeing China's economic data, including the consumer price index and producer price index, due out later on Monday to gauge how the world's third-largest economy is faring, analysts said.

Oil, which has plummeted from a record of over $147 a barrel in July, has risen over the past three months on hopes that the economic recession may be easing.

A strong rally in equities markets, which saw the Nasdaq cap its longest stretch of weekly gains in a decade on Friday, has also helped oil prices gain over 14 percent so far this month and 10 percent last week.

The US economy is expected to begin growing in the second half of this year, while the jobless rate is expected to peak in the first quarter of 2010, according to a survey of top forecasters released on Sunday.

US employers cut 539,000 jobs last month, the fewest since October, signaling the economy's steep decline might be easing and giving the stock market a boost.

"The steady upward trend in oil's trading range and the current dynamic is likely to be sufficient to stay OPEC's hand at the next meeting," Barclays Capital said in a research note on Friday.

Oil Settles Above $58 on Hopes for Economic Revival

Reuters
| 08 May 2009 | 03:27 PM ET

Oil settled above $58 barrel on Friday after positive data on the U.S. economy.

U.S. light, sweet crude traded up $1.92 to settle at $58.63 a barrel.

London Brent crude also traded higher.

"We believe that crude prices are being driven higher by a combination of rising expectations for a faster economic recovery, increased fund flows into commodities and higher utilization at U.S. refineries," said Adam Sieminski at Deutsche Bank in a research note.

The pace of job losses slowed in April in the United States, according to government data, providing further evidence to support the view that the economic climate might be improving.

Wall Street opened higher after the results of stress tests on U.S. banks showed no unexpected weaknesses.

Oil has gained more than 70 percent from a low of $33.55 in February, rallying with equity markets on hopes of economic recovery and also in response to oil supply cuts by the Organization of the Petroleum Exporting Countries.

Macro-economic data on major economies has begun to look less gloomy. U.S. retailers on Thursday posted better-than-expected monthly sales results for a second straight month in April.

German exports posted their first rise in 6 months in March, according to the country's Federal Statistics Office on Friday.

"The risk for investors is that some markets have got ahead of themselves and could be vulnerable should the flow of positive economic data start to deteriorate," Barclays Capital said in a research note.

The bank noted that data on oil demand remains mixed and the market's inventory overhang is still huge.

"If the recent bout of positive sentiment subsides, prices might well go through a phase of consolidation in the mid-50s," it said.

Life After the Oil Crash (click here for link)

Oil Rises Above $57 After Hitting 2009 High

Reuters | 07 May 2009
Oil rose above $57 a barrel on Thursday, having earlier hit a fresh 2009 high, as signs of economic improvement in the United States boosted expectations of future increases in demand for oil products.

However, a dip on U.S. stock markets saw oil prices pare gains.

U.S. light, sweet crude rose more than $1 to trade above $57 a barrel, off an earlier peak of $58.57, oil's highest level since Nov. 17, 2008. London Brent crude also traded higher.

Labor Department data on Thursday showed the number of U.S. workers filing new claims for jobless aid unexpectedly fell by 34,000 last week, adding to scattered indications that the severity of the recession may be easing.

These numbers preceded key U.S. non-farm payroll numbers due to be released on Friday.

Stress Test

The market was also watching for the results of the U.S. government stress tests on the ability of banks to weather a deep recession, to be released at 5pm EST.

Expectations for rising oil demand as summer approaches were fuelled by leaks of the test results that suggested most banks were healthier than earlier thought.

U.S. crude inventories rose again, but by a lower-than-expected 600,000 barrels against forecasts for a 2.2 million barrels build, while U.S. gasoline stocks fell last week by 200,000 barrels to 212.4 million, the Energy Information Administration said on Wednesday.

Saudi Arabia, the world's top oil supplier, said it would not raise supplies for the time being as it attempts to shore up prices.

The kingdom is pumping below 8 million barrels per day (bpd) and is unlikely to increase that production as world supply continues to outpace demand, Saudi Aramco Chief Executive Khalid al-Falih said on Wednesday.

Oil Shortage likely from 2010

Posted by Oilism.com on February 20th, 2009
From next year a lack of oil arise as the world economy recovers from the current deep recession.

This is said by the chief executive of the International Energy Agency (IEA) Nobuo Tanaka, he states that oil producers are investing too little in new projects with current market circumstances.

”The demand for oil is very low because of the extremely poor economic conditions. But if the recovery quick, likely first signals occur after 2010, we face a serious supply problem, if the investments do not increase’’said Tanaka.
Oil Projects

The members of oil cartel OPEC said earlier this month that they are disappointed, because of demand for oil thirty-five of all new oil projects are set on the long term.

Tanaka expects oil demand will grow next year by 1 percent, thanks to the recovery of growth in emerging economies like China and India. This year, the need for oil by the global recession is likely(for sure) lower than a year earlier.
Production

The chief executive of French oil group Total, Christophe De Margerie, warned Monday in the British newspaper Financial Times that oil producers already are near their production levels. Worldwide, the crude oil production is never higher than 89 million barrels per day. These are four million barrels per day less than he previously thought. The current demand for oil is about 84 million barrels per day. The IEA expects that the long term oil need for 2030 will certainly have grown to 100 million barrels per day.
Tension

According to De Margerie, the companies limited by the high cost of new projects, for example, in Canada and the continued political tensions in Iran and Iraq.

The current low oil revenues, according to him not only at the expense of new projects. They shall also ensure that existing projects are more likely to be stopped because it is too expensive they are longer in operation.

Oil Settles Above $56 on Tepid Supply Growth

Reuters | 06 May 2009 | 02:55 PM ET
Oil settled above $56 a barrel after news that private sector job losses slowed in April and government data showing an unexpected drawdown in gasoline stocks last week boosted hopes for a turnaround in the economy.

U.S. light, sweet crude traded up $2.50, or 4.64 percent, to settle at $56.34, after earlier reaching a fresh 2009 peak of $56.43 a barrel. London Brent crude also traded higher.

U.S. private sector job losses slowed in April as employers cut 491,000 from the salary rolls versus an expected loss of 650,000, a signal that the economy may be on its way to recovery.

"Recent 'light at the end of the tunnel' data in terms of the economic recovery has translated into a modest price recovery in the complex, independent of any fundamental statistics, which are still on the 'dark side'," said Jay Levine, a broker at Enerjay in Portland, Maine.

U.S. gasoline stocks declined unexpectedly last week, falling 200,000 barrels to 212.4 million barrels, the Energy Information Administration said on Wednesday.

The EIA reported that crude inventories increased 600,000 barrels last week to a fresh 19-year high at 375.3 million barrels, a smaller build than expected.

"Today's numbers weren't as bearish as market expectations and since the recent rally is based on the economic picture improving, so too are prices," Levine said.

Backyard Oil...(click here for full page video)

T. Boone Pickens sees oil hitting $75 by end-year

20 April 2009

ORLANDO, Florida - Texas oil billionaire T. Boone Pickens on Monday reiterated his prediction that crude oil prices would hit $75 a barrel this year as producers scale back production.

Pickens said about OPEC producers: "They told you they want $75 by the end of the year, I would count on that, I believe them."

OPEC has scaled back output to help support crude prices, which have dropped from record highs over $147 a barrel in July to around $47 a barrel on Monday.

(Reporting by Timothy Gardner; Editing by John Picinich)

Oil May Break Resistance, Rise to $71.55: Technical Analysis

By Christian Schmollinger

May 5 (Bloomberg) -- Crude oil may be headed for $71.55 a barrel after breaking through $56.10 a barrel, according to Barclays Capital.

Should the June crude oil contract push through the high of $56.10 a barrel reached on March 26, futures may climb past the Jan. 6 intraday high of $59.66 to $62 a barrel, Barclays Capital analysts, led by Jordan Kotick, said in a May 4 report.

Oil could jump to $71.55 a barrel as traders attempt to exit the large number of short positions, or bets that prices will fall, creating a so-called short squeeze, the analysts said. This is equal to the upward moves oil has made from a so- called head-and-shoulders bottom pattern starting in December.

“With the outlook for risky and pro-growth assets continuing to improve particularly as U.S. equity markets turn positive for the year, we are growing more constructive on energy markets,” Barclays Capital said.

Crude oil for June delivery was at $53.82 a barrel, down 65 cents, at 3:46 p.m. Singapore time on the New York Mercantile Exchange. Yesterday, it rose $1.27 to $54.47, the highest settlement since Nov. 24. Oil is up 21 percent this year.

Technical analysts use historical chart patterns to predict potential future price movements.

Oil Settles at 2009 High as Economic Optimism Grows

By: Reuters | 04 May 2009 | 03:48 PM ET

Oil prices rose to their highest close of the year Monday as investors bet the economic recession would end soon, paving the way for a recovery of ailing world energy demand.

U.S. light, sweet crude rose $1.27, or 2.39 percent, to settle at $54.47 a barrel—the highest since late March. London Brent crude also traded higher.

Oil's gains were encouraged by stronger equities markets and positive economic surveys in big fuel consumer nations China and India, showing their manufacturing sectors grew in April for the first time in months.

"The stock markets are up and there is the hope that we might be seeing some recovery,'' said Dan Flynn, energy analyst at Alaron Trading in Chicago.

Weakness in the U.S. dollar against the euro also supported greenback-denominated commodities markets.

Oil prices have bounced back from five-year lows just above $30 hit this winter on evidence the economic crisis is easing and as OPEC slashes output to trim excess supply.

Oil had also gained on Friday, spurred by improved U.S. consumer confidence as well as a Reuters survey that showed OPEC had delivered around 84 percent of promised curbs of 4.2 million barrels per day since September, around its highest-ever level of output discipline.

OPEC efforts to support the price have been in part offset by the impact of high inventories on land and large amounts of floating storage as traders have made use of a bearish market structure to stockpile oil.

Oil Rises to One-Month High Near $54

Reuters

| 04 May 2009 | 10:13 AM ET

Oil prices rose to more than a one-month high Monday on optimism the global economic recession was easing, spelling a potential recovery in world energy demand.

U.S. crude futures rose after rising as high $53.94 — the highest since late March.

London Brent crude rose.

Oil's gains were encouraged by stronger equities markets and positive economic surveys in big fuel consumer nations China and India showing their manufacturing sectors grew in April for the first time in months.

"We started to look at the green shoots in the United States and now we're starting to look at what I like to call the bamboo shoots," said Olivier Jakob of Petromatrix. "As long as these keep investors hoping economic growth is not that far away, the price should be relatively well supported."

Oil prices have bounced back from five-year lows just above $30 this winter on evidence the economic crisis is easing and as OPEC slashes output to trim excess supply.

Oil had also gained on Friday spurred by improved U.S. consumer confidence as well as a Reuters survey that showed OPEC had delivered around 84 percent of promised curbs of 4.2 million barrels per day since September, around its highest ever level of output discipline.

OPEC efforts to support the price have been in part offset by the impact of high inventories on land and large amounts of floating storage as traders have made use of a bearish market structure to stockpile oil.

South Texas

KS: Rain Rain Go Away

Oil Rises Above $51 on Stock Market Gains

Wednesday, 29 Apr 2009 | Source: Reuters

Oil prices rose on Friday, bouncing from losses earlier in the day, on support from equity markets and as traders sifted through evidence for hints of economic recovery.

U.S. light, sweet crude was trading higher. Earlier, it fell to as low as $50.43, its first decline after a three-day rally.

London Brent crude rose.

U.S. stock index futures rose, pointing to a higher open on Friday.

This week's gains in oil prices were fuelled in part by a strong performance on stock markets, with a key European benchmark posting its biggest-ever monthly gain in April led by banks.

But confidence was tempered by auto maker Chrysler's bankruptcy filing on Thursday.

"Although the difficulties of the U.S auto makers have been pretty much factored in, Chrysler's bankruptcy will have some impact on sentiment," said David Moore, chief commodities analyst at the Commonwealth Bank of Australia.

Some traders said support came from tightening supplies of gasoline, which in Europe this week become more expensive than products such as diesel and jet fuel for the first time in more than a year.

In China, the official purchasing managers' index (PMI) for April, rose to 53.5 from 52.4 in March, official data showed on Friday, marking its fifth consecutive month of improvement.

Oil, which has collapsed from a record high of more than $147 last year, has recovered from a low of $32.40 in December and in April posted a third monthly gain of nearly 3 percent.

Still, weak oil demand in the near term and rising crude inventories in the United States — now at their highest since 1990 — have slowed the pace.

Prices have recovered by more than 15 percent since the lows of last week. But prices have been caught in a narrow range between $48 and $52 this week.

U.S. factory order data for March due out later in the session are expected to give a better sense of whether the recession in the United States is easing.

Traders were also still cautious about the economic impact of a deadly flu strain.