On Wednesday the crude price rose as investors adopted a more optimistic outlook on the world economic recovery. Prices were also boosted by signs that record oil inventories may be on the decline.
U.S. EIA reported that oil inventories at Cushing, Oklahoma, dropped by 300 kb in the week ended May 21, the first drop at the storage hub since March. EIA also reported that total products supplied, a measure of demand, had risen to its highest level since January 2009.
However, global U.S. oil inventories rose 2.5 mln. b last week more than the 100 kb increase forecasted. Gasoline stockpiles fell 200 kb, where forecasts called for no change. Distillate inventories fell 300 kb, compared with estimates for a 300 kb increase.
The Obama administration plans to announce on Thursday a suspension of off-shore oil drilling in the Arctic until 2011, an Alaska senator said.
OPEC president Ecuador expects global oil prices to return to 70 - 80$/b range after being hit by market speculation linked to a growing financial crisis in Europe, its energy minister told Reuters on Tuesday.
Bank of America Merrill Lynch sharply lowered its forecast for second half 2010 oil prices to 78$/b from 92 $ previously. The bank cited the crisis of confidence in European sovereign debt, a much weakerthan- expected euro versus the dollar, and slightly higher-than-expected oil supply from producers outside OPEC. The bank slashed its forecast for world oil demand growth this year by 500 kb/d to 1.5 mln.b/d on expected slower economic growth.
BP Plc told congressional investigators on Tuesday that pressure tests on a drill pipe showed a fundamental mistake hours before the deadly explosion that caused the Gulf of Mexico oil leak
The Trans-Alaska Pipeline, partly owned by BP, shut down on Tuesday after spilling several thousand barrels of crude oil into backup containers, drastically cutting supply down the main artery between refineries and Alaska's oilfields. The pipeline normally ships about 677 kb/d. The accident comes at a difficult time for BP -holding 47% of the pipeline as it struggles to plug a gushing Gulf of Mexico oil well.
World oil demand will continue to grow through 2030, but demand that year will be about 2.5% less than previously thought due to use of renewables and higher oil prices, the U.S. EIA said on Tuesday. In its annual forecast the agency said global oil demand will average 103.9 mln.b/d in 2030, down from the 106.6 mln.b/d demand estimate in last year's forecast.
Japan's top refiner, Nippon Oil Corp, plans to refine 2% more crude in June, a company spokesman said on Wednesday, a switch from deep production curbs last year when demand tumbled amid a deep recession. The oil firm plans to reduce gasoline output and boost middle distillates production in response to a gasoline glut in Japan.
Japan's crude imports rose 4.3% in April from a year earlier, as demand picked up after heavy drops early last year when the nation faced its worst recession in decades.
