Thursday, August 23, 2012
Crude Oil Sold on Japan Export Drop, Gold Supported Before Fed Minutes
Crude Oil, Copper Follow Stocks Down as Japanese Export Slump Dents Sentiment
Gold and Silver Find Support on QE3 Speculation Before FOMC Minutes Release
Growth-sensitive crude oil and copper prices are following stocks lower in European trade in the wake of disappointing Japanese Trade Balance figures . The report showed exports fell at an annual pace of 8.1 percent in July, marking the largest drop in six months. Japan is the world's fourth-largest exporter and markets appear to have interpreted the sharp decline in overseas sales in terms of its implications for slowing global demand.
While risk aversion would typically be expected to boost demand for the safe-haven US Dollar and thereby extend selling pressure to gold and silver , the precious metals holding their own this time around. Support comes courtesy of speculation about Federal Reserve QE3 as markets gear up for the release of minutes from Augusts' FOMC meeting. Investors will pick apart the text for clues about the possibility of more stimulus being unveiled in the coming weeks, either at the Jackson Hole symposium on August 31 or policymakers' next sit-down in mid-September.
S&P 500 stock index futures are pointing firmly lower, hinting the risk-off mood is likely to carry forward as Wall Street comes online. This suggests oil and copper are likely to remain under pressure for now, although a dovish lean from Fed officials is likely to boost sentiment and force a recovery. Needless to say, such a result would add fuel to gold and silver's upward push. On the other hand, a set of minutes that doesn't materially advance the case for further accommodation may prove disappointing, forcing the anti-fiat metals to play catch-up to the downside.
WTI Crude Oil (NY Close): $96.84 // +0.58 // +0.60%
Prices are testing resistance at 97.82, the 61.8% Fibonacci retracement, with a break higher exposing a falling trend line set from the late-February swing top now at 99.30. This barrier is reinforced by the psychologically significant $100/barrel figure. Near-term support is at 95.41, the February 2 low, with a drop back below that targeting the 50% Fib at 93.90.
Spot Gold (NY Close): $16 37 . 80 // + 17 . 30 // + 1 . 07 %
Prices breached key resistance in the 1620.45-35.70 congestion area, exposing a major falling trend set from the August 23 2011 peak, now at 1664.47, as the next upside objective. A break above this barrier would mark a significant bullish trend development and initially open the door for a challenge of 1680.00. The 1620.45-35.70 area has been recast as near-term support.
Spot Silver (NY Close): $2 9 . 31 // +0. 53 // + 1 . 82 %
Prices are testing above resistance in the 29.28-42 area marked by the June 6 close and the 23.6% Fibonacci retracement. A break through this barrier exposes the 30.00 figure, followed by the 30.69-85 region defined by the 38.2% Fib and a pivot anchored at the November 21 2011 swing low. Near-term support is at 28.44, with a push below that targeting 27.68.
COMEX E-Mini Copper (NY Close) : $3.454 // +0.082 // +2.43%
Prices broke resistance at a falling trend line set from the April 3 high to challenge a horizontal barrier at 3.442, with a break above that exposing 3.535. The trend line, now at 3.416, has been recast as near-term support. A move back below that aims for a shorter-term rising line set from the August 2 low, now at 3.365.
Oil prices dip as traders eye Europe crisis talks
LONDON (AP) — The price of oil fell Wednesday as investors kept one eye on Europe's efforts to solve its debt crisis and the other on the potential for Middle East tensions to disrupt supply.
Benchmark crude for October delivery fell 33 cents to $96.53 per barrel in midday trading in London in electronic trading on the New York Mercantile Exchange. The contract finished 71 cents higher at $96.68 in New York on Tuesday.
Greece's prime minister will meet will key European leaders this week to ask for more time to meet deficit reduction targets. The country's continued access to bailout funds depends on the negotiations.
Traders also awaited the release of minutes from the Federal Reserve's previous policy meeting for signs that it might lower interest rates. Lower rates tend to drive oil prices because they steer investors away from less-risky investments.
Analysts at Goldman Sachs, meanwhile, said tightening supplies and oil-producing Iran's standoff with the West over its nuclear program were factors to be considered in the direction of oil prices.
"In our view, it is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand, keeping it in line with available supply. Further, as tensions between Iran and the West escalate, the risk to crude oil prices is becoming increasingly skewed to the upside," the analysts said in an email commentary.
Brent crude, which is used to price international varieties of oil, fell 68 cents to $113.96 per barrel on the ICE Futures exchange in London.
In other futures trading on the Nymex, heating oil was down 0.2 cents to $3.11 a gallon. Natural gas was 4 cents higher $2.81 per 1,000 cubic feet.
Benchmark crude for October delivery fell 33 cents to $96.53 per barrel in midday trading in London in electronic trading on the New York Mercantile Exchange. The contract finished 71 cents higher at $96.68 in New York on Tuesday.
Greece's prime minister will meet will key European leaders this week to ask for more time to meet deficit reduction targets. The country's continued access to bailout funds depends on the negotiations.
Traders also awaited the release of minutes from the Federal Reserve's previous policy meeting for signs that it might lower interest rates. Lower rates tend to drive oil prices because they steer investors away from less-risky investments.
Analysts at Goldman Sachs, meanwhile, said tightening supplies and oil-producing Iran's standoff with the West over its nuclear program were factors to be considered in the direction of oil prices.
"In our view, it is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand, keeping it in line with available supply. Further, as tensions between Iran and the West escalate, the risk to crude oil prices is becoming increasingly skewed to the upside," the analysts said in an email commentary.
Brent crude, which is used to price international varieties of oil, fell 68 cents to $113.96 per barrel on the ICE Futures exchange in London.
In other futures trading on the Nymex, heating oil was down 0.2 cents to $3.11 a gallon. Natural gas was 4 cents higher $2.81 per 1,000 cubic feet.
Crude Oil Prices Down After Weak Japan Data
Japan's wider-than-expected trade deficit sends oil prices lower
Market participants look to Fed minutes, U.S. EIA data on crude inventories
Tension in the Middle East means this price dip likely to be temporary, analysts say
Focus on upcoming meetings between Greece's prime minister, EU leaders
LONDON--Crude oil futures were lower Wednesday after Japan reported a wider-than-expected trade deficit, a worrying sign for the export-reliant economy that is the third largest oil consumer in the world behind the U.S. and China.
Iran discounts U.S. bid to lower oil prices by tapping into reserves
Iran’s OPEC representative has dismissed renewed U.S. threat to tap into its strategic oil reserves in a bid to bring down global crude prices as a ploy with short-term impact, predicting further price hikes in fall and winter seasons.
Iran’s representative to the Organization of Petroleum Exporting Countries (OPEC) Seyyed Mohammad Ali Khatibi insisted on Tuesday that the fresh U.S. threat to open its strategic reserves in an attempt to reduce the steadily climbing oil prices in global markets would definitely not lead to declining crude prices in the long run.
The Iranian official further pointed out that the U.S. would ultimately have to replenish its strategic reserves by importing greater amounts of oil, leading to an increasing demand for the key energy source and higher crude prices.
Khatibi, however, emphasized that the U.S. has not yet acted on its threat and that the OPEC may decide on a retaliatory measure in case the American government moves ahead with the plan.
Meanwhile, he said the foremost reason behind the recent hike in crude prices was concern by major consumers about uninterrupted supplies of the product.
He also described geopolitical developments in the Persian Gulf region and the Middle East, as well as reduced oil production level in the North Sea region, as other reasons contributing to the increase in this summer’s crude price.
Global oil prices hit a new high on Monday, with New York's main contract, West Texas Intermediate (WTI) light sweet crude, reaching the highest level in the past 3.5 months amid renewed rhetorical threats by the Israeli regime about waging war on Iran.
New York's main contract for delivery in September soared as high as USD 96.53 a barrel -- the highest level since May 11.
In London midday deals, Brent North Sea crude for October delivery increased by 66 cents to USD 114.37 a barrel.
Crude prices have been increasing following illegal U.S. sanctions on Iran’s energy sector and persisting Israeli publicity campaign, threatening unilateral military strikes against Iran.
Iran’s representative to the Organization of Petroleum Exporting Countries (OPEC) Seyyed Mohammad Ali Khatibi insisted on Tuesday that the fresh U.S. threat to open its strategic reserves in an attempt to reduce the steadily climbing oil prices in global markets would definitely not lead to declining crude prices in the long run.
The Iranian official further pointed out that the U.S. would ultimately have to replenish its strategic reserves by importing greater amounts of oil, leading to an increasing demand for the key energy source and higher crude prices.
Khatibi, however, emphasized that the U.S. has not yet acted on its threat and that the OPEC may decide on a retaliatory measure in case the American government moves ahead with the plan.
Meanwhile, he said the foremost reason behind the recent hike in crude prices was concern by major consumers about uninterrupted supplies of the product.
He also described geopolitical developments in the Persian Gulf region and the Middle East, as well as reduced oil production level in the North Sea region, as other reasons contributing to the increase in this summer’s crude price.
Global oil prices hit a new high on Monday, with New York's main contract, West Texas Intermediate (WTI) light sweet crude, reaching the highest level in the past 3.5 months amid renewed rhetorical threats by the Israeli regime about waging war on Iran.
New York's main contract for delivery in September soared as high as USD 96.53 a barrel -- the highest level since May 11.
In London midday deals, Brent North Sea crude for October delivery increased by 66 cents to USD 114.37 a barrel.
Crude prices have been increasing following illegal U.S. sanctions on Iran’s energy sector and persisting Israeli publicity campaign, threatening unilateral military strikes against Iran.
Europe Gasoline/Naphtha-Prices edge higher with oil
Wed Aug 22, 2012 12:45pm EDT
LONDON, Aug 22 (Reuters) - Gasoline barge prices in
northwest Europe edged higher on Wednesday, boosted by late
gains in crude oil and a larger-than-expected draw in U.S.
gasoline stocks.
U.S. government data showed gasoline inventories had fallen
962,000 barrels last week to 202.74 million barrels, against
analyst expectations of a 700,000 barrel draw. The fall in
stocks could help revive imports.
Traders said a lack of prompt supply was also supporting the
spot market.
"There is not a lot of oil about and good demand, into west
Africa, Mexico, etc," said a gasoline trader.
Traders are hoping for a recovery in exports to West Africa,
where pressure on the Nigerian government is mounting to resume
subsidy payments for fuel.
Many private fuel importers have stopped importing gasoline
because the government is holding up payments.
Nigeria's capital city suffered severe fuel shortages on
Wednesday, as a union halted deliveries and threatened to cut
supplies to the rest of the country by Friday.
"We shall see if that will actually be realised," said a
gasoline trader, doubtful that a resolution was in sight.
A parliamentary probe found corruption in Nigeria's fuel
subsidy scheme cost the country $6.8 billion in three years, but
efforts to end subsidies have been in vain.
Naphtha is still seeing steady demand from petrochemical
companies in Europe, which are switching away from rival
feedstock propane. The propane/naphtha spread has flipped into
positive territory, with propane cargoes trading at a $10
premium to naphtha for September.
GASOLINE
* Five Eurobob barges traded in the window at $1,094-$1,06 a
tonne fob ARA, while a sixth for delivery at later dates in
September traded at $1,088 a tonne fob ARA.
* Prices were at the upper end of Tuesday's $1,090-$1,094 a
tonne fob ARA range.
* Seven barges traded ahead of the window at $1,094-$1,06 a
tonne fob ARA. Trafigura, Cargill and Glencore bought from
Gunvor, Hess, Chevron and Vitol.
* Eurobob's crack to dated Brent BFO- was at $14.56 a
barrel at 1626 GMT, steady from the previous close.
* Three barges of premium unleaded gasoline traded in the
window, two at $1,120 a tonne fob ARA and one at $1,108 a tonne
fob ARA. Prices were up from $1,107-$1,111 a tonne fob ARA the
previous session.
* Statoil sold the barges to Total and Vitol.
* ICE Brent crude futures were up 17 cents at
$114.81 a barrel around the same time.
* September U.S. RBOB gasoline futures were up 0.74
percent at $3.0879 a gallon around the same time.
LONDON, Aug 22 (Reuters) - Gasoline barge prices in
northwest Europe edged higher on Wednesday, boosted by late
gains in crude oil and a larger-than-expected draw in U.S.
gasoline stocks.
U.S. government data showed gasoline inventories had fallen
962,000 barrels last week to 202.74 million barrels, against
analyst expectations of a 700,000 barrel draw. The fall in
stocks could help revive imports.
Traders said a lack of prompt supply was also supporting the
spot market.
"There is not a lot of oil about and good demand, into west
Africa, Mexico, etc," said a gasoline trader.
Traders are hoping for a recovery in exports to West Africa,
where pressure on the Nigerian government is mounting to resume
subsidy payments for fuel.
Many private fuel importers have stopped importing gasoline
because the government is holding up payments.
Nigeria's capital city suffered severe fuel shortages on
Wednesday, as a union halted deliveries and threatened to cut
supplies to the rest of the country by Friday.
"We shall see if that will actually be realised," said a
gasoline trader, doubtful that a resolution was in sight.
A parliamentary probe found corruption in Nigeria's fuel
subsidy scheme cost the country $6.8 billion in three years, but
efforts to end subsidies have been in vain.
Naphtha is still seeing steady demand from petrochemical
companies in Europe, which are switching away from rival
feedstock propane. The propane/naphtha spread has flipped into
positive territory, with propane cargoes trading at a $10
premium to naphtha for September.
GASOLINE
* Five Eurobob barges traded in the window at $1,094-$1,06 a
tonne fob ARA, while a sixth for delivery at later dates in
September traded at $1,088 a tonne fob ARA.
* Prices were at the upper end of Tuesday's $1,090-$1,094 a
tonne fob ARA range.
* Seven barges traded ahead of the window at $1,094-$1,06 a
tonne fob ARA. Trafigura, Cargill and Glencore bought from
Gunvor, Hess, Chevron and Vitol.
* Eurobob's crack to dated Brent BFO- was at $14.56 a
barrel at 1626 GMT, steady from the previous close.
* Three barges of premium unleaded gasoline traded in the
window, two at $1,120 a tonne fob ARA and one at $1,108 a tonne
fob ARA. Prices were up from $1,107-$1,111 a tonne fob ARA the
previous session.
* Statoil sold the barges to Total and Vitol.
* ICE Brent crude futures were up 17 cents at
$114.81 a barrel around the same time.
* September U.S. RBOB gasoline futures were up 0.74
percent at $3.0879 a gallon around the same time.
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