|
||||||||||
|
Oil Trades Near Record on Speculation of Reduced U.S. Supplies G. Smith and C. Schmollinger / Bloomberg | September 18, 2007 RELATED: $200 Dollar a Barrel Oil Is Bilderberg Plan To Destroy Middle Class Crude oil rose to more than $81 a barrel for the first time, on speculation rising demand will deplete stockpiles needed during the Northern Hemisphere winter. A U.S. Energy Department report tomorrow will probably show crude supplies fell for the 10th time in 11 weeks, according to a Bloomberg News survey of 12 analysts. The Federal Reserve is expected to cut lending rates today to help sustain economic growth in the U.S., the world's largest oil-consumer. ``There's still very strong momentum,'' said Olivier Jakob, the managing director at Petromatrix GmbH in Zug, Switzerland. ``The stock drawdown last week was pretty big'' and ``there's the expectation that if interest rates are lower, that's supportive of commodities and oil.'' Crude oil for October delivery rose as much 67 cents, or 0.8 percent, to $81.24 a barrel, on the New York Mercantile Exchange, the highest intraday price since trading began in 1983. It traded for $80.86 at 11:09 a.m. in London. The contract gained $1.47, or 1.9 percent, to $80.57 yesterday, a record closing price. (Article continues below)
Brent crude oil for November settlement climbed as much as 37 cents, or 0.5 percent, to $77.35 a barrel on the London-based ICE Futures Europe exchange, after rising 1 percent yesterday. It was at $76.97 at 11:09 a.m. London time. Dwindling Supply U.S. stockpiles of crude probably fell 2 million barrels last week, based on the median estimate from the Bloomberg survey. Inventories held 322.6 million barrels on Sept. 7, or 2.7 percent less than a year earlier, and 8.3 percent more than the five-year average for the period, the Energy Department said Sept. 12. ``If you focus on the heating oil inventories, then investors should increase their long positions in crude oil contracts,'' said Hirofumi Kawachi, an energy analyst at Mizuho Investors Securities Co. in Tokyo. ``Lower interest rates will clearly have a positive impact. It will support the level of consumption in the U.S.'' Interest-rate futures show a 50 percent chance for a half- percentage point cut in the Fed's 5.25 percent target for overnight loans between banks. The other half of the bets are for a quarter- point reduction. ``If we do have another big draw in the stocks, then that will probably have a more substantial impact'' on prices than the Fed decision, Altavest's Hartmann said. ``There could be some fears, if the Fed does not lower rates, that that will cause some economic slowdown.'' Fourth-Quarter Demand Tomorrow's Energy Department report will probably show U.S. distillate stockpiles, including heating oil and diesel, gained 1.4 million barrels last week, the ninth straight increase, according to the analyst survey. U.S. crude stockpiles have fallen 8.9 percent after reaching a nine-year high of 354 million barrels on June 29. The decline accelerated late in July after current-month prices rose above those for later contracts. That situation, known as backwardation, discouraged companies from storing oil. ``The investor class has been emboldened by the backwardation and OPEC's intention to keep inventories lower,'' said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. The Organization of Petroleum Exporting Countries said last week it would produce an additional 500,000 barrels of oil a day beginning Nov. 1 to help meet fourth-quarter demand. OPEC produces about 40 percent of the world's oil. OPEC's announcement was ``too little, too late'' to keep prices from rising above $90 this year, Goldman Sachs Group Inc. analysts, led by Jeffrey Currie, said in a research note yesterday. The investment bank raised its year-end price forecast to $85 a barrel from the $72 it had predicted. Oil gained 9.6 percent this month as hurricanes threatened oil output in the Gulf of Mexico and U.S. stockpiles fell more than forecast. September accounts for about a third of the storms and hurricanes reported in the North Atlantic annually, according to U.S. National Hurricane Center data. Weather systems over the Bahamas and near Florida's northeast coast may combine in coming days, the center said in an advisory on its Web site. CLICK ON THE BANNER TO
BUY TERRORSTORM IN |
|
||||||||
