U.S. crude oil futures extended gains, soaring more than $2 on Wednesday, supported by a rally on Wall Street and forecasts calling for a heavy drawdown in domestic crude inventories ahead of weekly inventory reports.
IN FOCUS
- Peru plans to charge higher royalties on exports of natural gas, the government said on Wednesday as it tries to end price distortions in its energy market and respond to critics opposed to exporting the fuel.
- The U.S. Energy Information Administration on Wednesday said it expected domestic natural gas production to rise by 2.1 percent in 2010, in line with previous estimates.
- The percentages of oil and gas output that remained shut in the Gulf of Mexico on Friday due to Hurricane Alex dropped from Thursday's levels, the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement said. About 12.8 percent of oil output remained shut on Friday, down from 21.4 on Thursday, while 10.8 percent of natural gas production remained shut, down from 13.7 percent.
- The U.S. government has told China's largest oil and gas firm Petro China not to process Sudanese crude at its new refinery in south China, three industry sources told Reuters on Monday.
- Asian imports of West African crude oil hit a record high of 1.93 million barrels per day (bpd) in July, a Reuters poll showed on Wednesday, up from 1.65 million bpd in June.
- U.S. crude inventories fell much more than expected last week as oil imports dropped, according to weekly data from the American Petroleum Institute (API) trade group Wednesday.
- U.S. crude oil inventories likely fell last week, extending a slide of two consecutive weeks, as imports probably dropped and after operators in the Gulf of Mexico temporarily shut in some production due to Hurricane Alex.
FUNDAMENTAL OUTLOOK
Crude oil is trading tad higher on international bourses today. We expect crude oil to extend its upward rally today on the back of continuous drawdown in its inventory level. Buying at dips is recommended.
