WSJ:OIL FUTURES: Crude Lower On Uncertainty Over U.S. Debts Talks
SINGAPORE (Dow Jones)--Crude-oil futures traded lower in Asia Wednesday amid continued uncertainty in the market as talks stalled among U.S. lawmakers to cut a deal to raise the borrowing limit.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $99.27 a barrel at 0650 GMT, down $0.32 in the Globex electronic session. September Brent crude on London's ICE Futures exchange fell $0.10 to $118.18 a barrel.
"The [oil] complex continues its errant ways amidst mixed vibes regarding the impact of the outcome to the debt ceiling negotiations," Jim Ritterbusch, head of oil advisory firm Ritterbusch & Associates, said in a note to investors.
Crude might advance towards $102 a barrel over the next few days, although the pace of its rally may be gradual until the debt ceiling issue is resolved, MF Global analyst Tom Pawlicki said.
"A settlement [of the debt ceiling talks] should be bullish," although a slowing rate of decline in U.S. oil stocks in the near term might slow the pace of crude's rise, he added.
The American Petroleum Institute, an industry group, said Tuesday that U.S. oil stocks rose 4 million barrels last week. Traders will wait to see whether a more closely watched survey from the U.S. Department of Energy, due 10:30 a.m. EDT Wednesday, confirms the build, but the figure still sent oil futures into negative territory overnight.
Analysts surveyed by Dow Jones Newswires forecast U.S. crude stockpiles to fall 1.4 million barrels last week, according to a survey by Dow Jones Newswires. Gasoline inventories are likely to increase 400,000 barrels, while stocks of distillates, including heating oil and diesel, are expected to rise 1.7 million barrels.
Crude supply will likely tighten next year due to global oil-demand growth, mostly from non-Organization for Economic Cooperation and Development countries, analysts at Barclays Capital said.
"The ineffectiveness of the supply side to catch up with [demand growth] has...created an extended period of supply capacity tightness, which will be apparent in 2012."
This may boost crude prices as key oil producers are set on a sustained path of far higher social expenditures, indicating far higher oil price requirements, they said.
Oil prices at $100 a barrel "could very well be the new sustainable norm," they said.
Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 97 points to $3.1633 a gallon, while August heating oil traded at $3.1085, 49 points lower.
ICE gasoil for August changed hands at $975.75 a metric ton, down $2.75 from Tuesday's settlement.
