Futures dropped as much as 1.5 percent before reports this week that may show U.S. consumer spending climbed at the slowest pace in almost a year and manufacturing cooled. The IEA, adviser to 28 nations, will act again if needed, Executive Director Nobuo Tanaka said in Beijing on June 25. Greek lawmakers will vote on a five-year austerity plan that must pass for the cash- strapped nation to secure more international aid.
Leading into the IEA’s decision to release stockpiles, we had a global economy that is slowing and we already had concerns over Greece, the IEA’s move suggests there is more urgency for lower oil prices than the market though.
Crude for August delivery fell as much as $1.34 to $89.82 a barrel on the New York Mercantile Exchange, and was at $90.34 at 8:43 a.m. Singapore time. Prices rose 14 cents, or 0.2 percent, to $91.16 on June 24, and are up 15 percent in the past year.
Brent oil for August delivery fell as much as $2.84, or 2.7 percent, to $102.28 a barrel on the ICE Futures Europe exchange in London. The contract dropped $2.14, or 2 percent, to $105.12 a barrel on June 24, the lowest close since Feb. 18.
Brent, the European benchmark contract, traded at a premium of $12.75 a barrel to U.S. West Texas Intermediate futures.
The Federal Reserve is unlikely to start a third round of quantitative easing, known as QE3, when a $600 billion purchase program ends this week.
The world’s biggest crude user may release oil stockpiles to drive prices lower and stimulate consumption.
Instead of QE3, we have IEA1, which is the release of strategic oil reserves, the IEA’s decision is really pushing oil prices down.
Consuming nations will release emergency oil stockpiles through the IEA for the third time in more than three decades as the war in Libya chokes global supplies, the Paris-based agency said on June 23.
The U.S. Strategic Petroleum Reserve will provide 30 million barrels of the IEA release, European members will supply about 20 million and Asian nations about 10 million barrels.
It’s helping Greece, it’s helping Europe, it’s helping everyone by lowering the cost of oil imports. Except in the case of Portugal, were they continue to have one of the most expensive final consumer prices for the motorist at the filing station, at the moment BP has the most expensive price per liter 1,601 for regular 95 Octane.
This attitude by the petrol companies Galp, BP, Repsol and Cepsa will affect Portugals austerity plan, as consumer demand will continue to drop as well as Tax revenue derived from petrol produtcs.
It seems like there’s a policy shift by the U.S. and some European Nations to try and get external markets to help lower crude prices, except in Portugal were consumer prices are inflated to record cost.
written by ABSTRACTMIND @ 12:12 pm, ,
Futures gained 1.7 percent after Mohammad Aliabadi, the acting Iranian oil minister and OPEC president, said the group will maintain current output for now. A Gulf delegate said yesterday that the Organization of Petroleum Exporting Countries was going to increase quotas.
The market is higher because OPEC failed to raise production ,we seeing the big reaction to the OPEC news because a quota increase was expected.
Crude oil for July delivery rose $1.65 to $100.74 a barrel on the New York Mercantile Exchange, the highest settlement since May 31. Prices are up 40 percent in the past year.
Brent crude oil for July delivery climbed $1.07, or 0.9 percent, to end the session at $117.85 a barrel on the London- based ICE Futures Europe exchange. It was the highest settlement since May 4.
Saudi Arabian Oil Minister Ali Al-Naimi, representing OPEC’s biggest producer, said his country is ready to supply whatever the market needs.
According to WorldWatch, OPEC has sentenced its own fate, as this failure in production targets will cause a further 3% in crude demand.
Saudi Arabia, together with Kuwait, Qatar and the United Arab Emirates, were ready to supply more oil to the market, al- Naimi said. The four nations proposed a 1.5 million-barrel-a-day increase from the current 28.8 million. That would have meant output of 30.3 million barrels a day.
Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to an increase, as these Nations have serious social and economical problems they also have limited spare capacity
More oil is going to quietly come out of the Gulf, they are concerned about rising demand in the third and fourth quarters and don’t want to see the market starved and see prices rise to such a high level that they hurt economic growth.
JPMorgan analysts are also SPECULATING that oil prices will rise, this is what the Bank needs to meet its financial obligations and cover up its bad credit defecit.
The knee-jerk reaction to the OPEC news is probably a little overdone, it does show that there’s dissension among the members. We’re trading more on the political implications of the meeting than any changes in physical oil supply.
OPEC’s failure to reach a decision on targets shows Iran has increased its stature within the group, according to Petromatrix GmbH. Iran has replaced Saudi Arabia as the most influential member.
The 11 members with quotas, all except Iraq, produced 26.22 million barrels a day last month, 1.375 million above their target, according to WorldWatch News estimates.
OPEC has been operating well above their allocation levels for some time, over 1.3 million barrels a day above, even with Libya production off the market, the allocation levels have had little connection to actual production levels for some time.
Oil in New York has traded between $95.02 and $104.60 since May 9..
written by ABSTRACTMIND @ 12:47 pm, ,