Commodity Blog

Posts Tagged ‘crude oil inventories’

Oil, nickel and wheat slumped today, followed by most other commodities, as the uncertainty about the future of the world economy damped global demand.

At present, the main driver for markets is the situation in Europe. The European leaders were meeting on the weekend and then yesterday, but it’s still unclear what measures will be taken to resolve all the difficulties region has encountered. The absence of clear answer to the issue of Europe keeps traders in depressed mood. The Standard & Poor’s GSCI Index fell 1.8 percent.

Oil also fell after the US stockpiles of crude increased more than was forecast. US crude oil inventories increased by 4.7 million barrels 337.6 million barrels from the previous week, while the increase by 500,000 barrels was anticipated by analysts.

Brent crude oil traded at $109.97 per barrel today as of 00:44 GMT on ICE, following yesterday’s drop from $110.85 to $109.50 per barrel. Nickel declined from $1008.50 to $973.50 per kilogram on MCX before trading today at $972.20 per kilogram. Spot price for wheat was $6.2375 on CBoT today per bushel after it fell from $6.3650 to $6.1950 yesterday.

Fundamentals weren’t good for oil, making prices to go down. Among the negative factors were the increase of the US stockpiles and the downgrade of Spain’s credit rating by Standard & Poor’s.

US oil inventories increased by 1.3 million barrels to 337.6 million barrels from a week ago. The average level for crude oil refinery inputs was 14.5 million barrels per day during last week ending October 7, 563 thousand barrels per day less compared to the previous week’s average.

S&P cut the long-term rating on the Kingdom of Spain to AA- from AA and set the outlook to negative. The downgrade of Spain refueled the fears that the credit crisis would spread across the European Union. The problems in Europe can slow the global economic recovery, reducing demand for oil.

November futures for delivery of crude for fell $0.46 to $83.77 per barrel in electronic trading on NYMEX before trading at $84.01. Brent crude traded at $111.30 per barrel as of 1:46 GMT on ICE after it went down from $111.25 to $111.17 yesterday.

Commodities, including crude oil and corn, gained today as prospects for the US and European economies improved, making traders more willing to invest into riskier assets.

The speculation about recapitalization of the European Union banks and hopes that the European Central Bank would support the region’s economy reduced concerns about the debt crisis in Europe.

The sentiment about the economy of the United States improved after Federal Reserve Chairman Ben Bernanke signaled about possible implementation of another round of stimulating measures. The outlook for the American economy further improved after the ADP employment report showed the growth by 91,000 working places, compared to the median forecast of 76,000. The non-farm payrolls will be released on October 7 and economists think they will show an increase by 51,000 jobs. Employment was the major concern for the US policy makers for a long time and improvement of this sector is definitely a good sign.

Crude oil also gained as the US inventories decreased by 4.7 million barrels to 336.3 million barrels last week instead of rising by 1.0 million as was expected.

Futures for delivery of corn in December gained $0.1225 (2.1 percent) to $6 per bushel as of 10:22 on CBoT. November futures for delivery of crude oil jumped as much as $3.54 (4.7 percent) to $79.21 per barrel by 13:42 on NYMEX.

Crude oil declined on the speculation the growing US fuel inventories and the signs of the global economic slowdown will decrease demand for fuel. The report of the Energy Department showed the gasoline stockpiles increased by 1.9 million barrels last week. Analysts predict that the government report today will show the industrial production almost stalled last month. October futures for delivery of crude oil fell $0.59 to $88.32 per barrel on NYMEX before trading at $88.68.

Corn fell as ethanol production in the US slowed, reducing demand. The report of the Energy Department showed the production in ethanol rose 6.9 percent in the first five month of 2011, compared with the 29.7 percent in the same period of 2010. The US Department of Agriculture predicted the global consumption of corn will fall to 505.1 million metric tons in September from 510.09 million tons in August. Contract for delivery of corn in December dropped 0.8 percent to $7.1875 per bushel on CBoT.

Crude oil today gained 1 percent, retreated 0.8 percent and later fluctuated. Crude gained as US reserves declined by 4.0 million barrels to 353.1 million last week, while analysts predicted a decline by 1.9 million. Oil lost its gains on speculation that the global economic growth is faltering. October contract for delivery of crude oil fell $0.07 to $89.27 per barrel by 12:13 on NYMEX, while today’s price range was from $88.59 to $90.23.

The same concerns that hurt oil boosted gold. Worries about economic recovery intensified after US jobless claim climbed from 412,000 to 414,000 last, while they were expected to go down to 407,000. Today’s speech of European Central Bank President Jean-Claude Trichet, after the central bank kept the target interest rate unchanged at 1.5 percent, were rather pessimistic and spurred the speculation the ECB is going to cut borrowing costs in the near future. Futures for delivery of gold in December rose $39.90 (2.2 percent) to $1,857.50 as of 14:18 on COMEX. The problems in Europe allowed the precious metal to advance 31 percent in 2011.

Crude oil gained today on concerns that the disturbance in the Gulf of Mexico would turn into a tropical cyclone. The output from the region has already declined by about 36.9 percent for and 18.1 percent for natural gas. Analysts expect that the report tomorrow will show that US inventories of crude decrease by 2 million barrels last week. October futures for delivery of crude oil gained $3.32 to $89.34 per barrel on NYMEX, posting the biggest advance since August 10.

Gold slipped today as gains of stocks reduced demand for metal as a safe haven and prompted traders to take profit from record prices. The Standard & Poor’s 500 Index surged 2.7 percent and the MSCI All-Country World Index jumped as much as 2.8 percent. The precious metal also retreated after the dollar climbed to the highest level in more than a month against the basket of six major currencies. December futures for delivery of gold retreated $55.70 (3 percent) to $1,817.60 per ounce as of 13:25 on COMEX. December futures for silver slipped $0.237 (0.6 percent) to $41.631 per ounce.

Copper fell as prospects for the global growth worsened. Economics and Business Research predicted that growth of the global economy will slow to 3 percent in 2011 down from 4.2 percent in 2010. December futures for delivery of copper slipped $0.008 (0.2 percent) to $4.1095 per pound by 13:12 on COMEX. The metal declined 8.3 percent this month.

Oil, on the other hand, preferred to react to good news, rising after personal consumption in the US increased. Spending of the US citizens rose 0.8 percent in July, following the drop by 0.1 percent in June. The report of the Energy Department tomorrow is expected to show that inventories of gasoline decline, while stockpiles of crude grew. October contract for delivery of crude oil gained $0.45 to $87.72 per barrel in electronic trading on NYMEX.

Crude oil advanced today as US inventories declined, while refinery rate increased. US stockpiles of crude fell 2.2 million barrels to 351.8 million. Refineries operated at 90.3 percent of capacity, this year’s record set in July 15. October futures for crude oil delivery rose $0.65 (0.8 percent) to $86.09 per barrel as of 11:58 on NYMEX, following the drop by 1 percent to $84.55.

Gold fell further today as market sentiment continues to improve. Traders expect that Federal Reserve Chairman Ben S. Bernanke will speak about new round of stimulus for the US economy on August 26. Gold is now considered more as a protection from the global economic instability rather than a hedge against inflation, and as such suffered from the speculation about new quantitative easing. December futures for delivery of gold slumped as much as $72.30 (3.9 percent) to $1,789 per ounce by 12:11 on COMEX, heading to the biggest decline since February 4, 2010.

Gold rallied today above $1,800 as global stocks slumped amid concerns about the economies of Europe and the United States. The MSCI World Index of shares plunged to the lowest level since September. December futures for delivery of gold jumped as much as $43.80 (2.5 percent) to $1,786.80 by 12:34 on COMEX. The metal reached the record $1,801 intraday.

Crude oil rose today despite the nervousness on markets after the US stockpiles unexpectedly declined. The inventories slipped by 5.2 million barrels from the previous week, while an increase by 1.7 million barrels was anticipated. Crude also advanced after the Federal Reserve pledged to bolster the US economy. September futures for delivery of crude oil advanced $1.88 (2.4 percent) to $81.18 per barrel as of 10:35 on NYMEX.

The crude oil is falling for the 6th day on the spot market now, weakened by the poor prospects for the US economic growth. In addition, today’s drop is the biggest one since June 23.

The main factor for the oil’s decline, by the words of the market experts, is the low outlook for the US economy. The government’s measures to cut the budget spending and the potential credit rating downgrades, albeit not very probable, — they all press heavily in the industrial commodities, of which oil is the most volatile one.

In addition, the crude oil inventories continued to grow in the United States. As the today’s report shows, the commercial reserves of this commodity has reached 355 million barrels.

The spot price for Brent blend of oil decreased from $116.18 to $112.99 per barrel as of 19:20 GMT today. The lowest daily level was at 112.79 — the price minimum since July 6.