March 10, 2010, 4:52 AM EST
By Grant Smith
March 10 (Bloomberg) -- Oil traded little changed before a report forecast to show that crude inventories expanded for a sixth week in the U.S., the world’s largest energy user.
Crude bounced back from earlier losses as the dollar gave up some gains against the euro, reinforcing oil’s appeal for hedging inflation. Crude declined yesterday after the American Petroleum Institute said inventories rose by 6.5 million barrels in the week ended March 5. An Energy Department report today is forecast to show supplies climbed by 2 million barrels.
“Demand in the U.S. has been very depressed,” said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. “That’s looking like it’s starting to pick up and get to more average levels, and we expect a gradual improvement in prices. The risk is that the inventory numbers will not be so positive today.”
Crude for April delivery was at $81.55 a barrel, 6 cents higher in electronic trading on the New York Mercantile Exchange as of 9:32 a.m. London time. It had fallen as low as $81.05 earlier today. Brent crude oil for April delivery traded 16 cents higher at $80.04 a barrel on the London-based ICE Futures Europe exchange.
The U.S. dollar lost some of its strength to trade at $1.357 against the euro, compared with $1.3543 earlier.
More Demand
In its Short-Term Energy Outlook published yesterday, the department revised up its projection for global oil consumption this year to 85.51 million barrels a day from 85.3 million last month. That’s up 1.7 percent from last year’s 84.04 million barrels a day. Demand will climb to 87.06 million in 2011, up 0.2 percent from last month’s projection.
“The recovery does look like it’s becoming entrenched, but things are still quite slow,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of global oil output, will release its monthly report on supply and demand later today. The group is scheduled to meet on March 17 in Vienna to review policies, having left quotas unchanged for a fourth time at its last meeting on Dec. 22.
Saudi Arabia had 4 million barrels a day of spare oil output capacity that can be absorbed into the market when global energy consumption recovers, the head of the kingdom’s state- owned oil company said yesterday.
“Oil supply will decline if there is no investment, so that 4 million could be absorbed by demand alone,” said Khalid al-Falih, chief executive officer of the Saudi Arabian Oil Co., in a speech at a Cambridge Energy Research Associates conference in Houston.
--Editors: Mike Anderson, Randall Hackley.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
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Source: http://www.businessweek.com/news/2010-03-10/oil-pares-losses-on-fuel-demand-outlook-as-china-s-imports-gain.html
By Grant Smith
March 10 (Bloomberg) -- Oil traded little changed before a report forecast to show that crude inventories expanded for a sixth week in the U.S., the world’s largest energy user.
Crude bounced back from earlier losses as the dollar gave up some gains against the euro, reinforcing oil’s appeal for hedging inflation. Crude declined yesterday after the American Petroleum Institute said inventories rose by 6.5 million barrels in the week ended March 5. An Energy Department report today is forecast to show supplies climbed by 2 million barrels.
“Demand in the U.S. has been very depressed,” said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. “That’s looking like it’s starting to pick up and get to more average levels, and we expect a gradual improvement in prices. The risk is that the inventory numbers will not be so positive today.”
Crude for April delivery was at $81.55 a barrel, 6 cents higher in electronic trading on the New York Mercantile Exchange as of 9:32 a.m. London time. It had fallen as low as $81.05 earlier today. Brent crude oil for April delivery traded 16 cents higher at $80.04 a barrel on the London-based ICE Futures Europe exchange.
The U.S. dollar lost some of its strength to trade at $1.357 against the euro, compared with $1.3543 earlier.
More Demand
In its Short-Term Energy Outlook published yesterday, the department revised up its projection for global oil consumption this year to 85.51 million barrels a day from 85.3 million last month. That’s up 1.7 percent from last year’s 84.04 million barrels a day. Demand will climb to 87.06 million in 2011, up 0.2 percent from last month’s projection.
“The recovery does look like it’s becoming entrenched, but things are still quite slow,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of global oil output, will release its monthly report on supply and demand later today. The group is scheduled to meet on March 17 in Vienna to review policies, having left quotas unchanged for a fourth time at its last meeting on Dec. 22.
Saudi Arabia had 4 million barrels a day of spare oil output capacity that can be absorbed into the market when global energy consumption recovers, the head of the kingdom’s state- owned oil company said yesterday.
“Oil supply will decline if there is no investment, so that 4 million could be absorbed by demand alone,” said Khalid al-Falih, chief executive officer of the Saudi Arabian Oil Co., in a speech at a Cambridge Energy Research Associates conference in Houston.
--Editors: Mike Anderson, Randall Hackley.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
Related Articles
Source: http://www.businessweek.com/news/2010-03-10/oil-pares-losses-on-fuel-demand-outlook-as-china-s-imports-gain.html
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