Ahead of a delayed weekly EIA inventory, crude oilis traded at 92.25 down 68cents. Oil futures were trading marginally lower. Crude oil prices had already factored in the optimism on US deal for averting fiscal cliff and were due for a correction. Weak construction spending data for November in the US provided the trigger for correction in energy contract Wednesday. Traders worries about growing uncertainties over the US debt ceiling and the delayed budget and spending cuts have seen traders returning to the safety of the US dollar and US Treasuries. The higher US dollar weighs on the value of crude oil. Today’s inventory and the much watched US Nonfarm payroll data will give traders something to look forward to.
Crude oil prices declined the first time in 3-days, on speculation that this week’s gains were unjustified, as the US budget deal is insufficient to ensure growth in the world’s biggest oil consuming country. Inventory estimates project that Crude oil to decline by 0.5mn barrels. U.S. crude oil inventories fell sharply last week and imports tumbled, data from the American Petroleum Institute showed on Thursday, as Gulf Coast refiners drew down stocks for end of the year tax purposes.
The strength of the US dollar will continue to weigh on energy prices as the dollar rises on economic uncertainties in the US as well as the latest FOMC minutes which show that the Fed’s might well limit or curtail their monetary easing policies.
Other data effecting markets yesterday, showed that Gasoil stocks independently held at the Amsterdam-Rotterdam-Antwerp hub gained 5.8 percent week-on-week, data from Dutch oil analyst Pieter Kulsen showed, but conditions are in place which could push levels lower in coming weeks.
Japanese power demand rose 0.8 percent in December from a year earlier, marking the second straight year-on-year gain, as colder-than-normal weather pushed up heating demand, a Reuters calculation based on industry data showed on Friday.
Ivory Coast hopes to raise its oil output to around 200,000 barrels per day in five years from 32,000 bpd now thanks to recent discoveries and ongoing exploratory drilling, a top oil official said.
Output fell 4 percent to 2.5 million barrels of crude and natural gas equivalent per day from 2.61 million boepd in November 2011, the ANP said.
Natural gas prices declined to a 3-month low on NYMEX, after forecasts of milder weather that would cut demand for the heating fuel. Natural gas inventories are expected to decline by 120-130bn cubic feet, actual data will be released by EIA later in the day. NG is currently trading at 3.212 adding 0.018 as traders grabbed up bargains.
