Wed Mar 31, 2010 9:29am BST
By Chris Baldwin
LONDON, March 31 (Reuters) - Oil traded above $82 on Wednesday, heading for its fifth consecutive quarterly gain as markets awaited U.S. crude inventory data later in the day.
Front-month crude futures on the New York Mercantile Exchange CLc1 have gained almost 4 percent so far this year, trading at $82.44 a barrel at 0807 GMT, up 7 cents from Tuesday. Brent crude for May LCOc1 rose 3 cents to $81.31 in London.
A Reuters poll of 14 analysts showed U.S. crude oil inventories likely rose last week for the ninth straight time. Weekly government statistics from the Energy Information Administration will follow later on Wednesday.[ID:nN30173183]
"One week ago, the DOE reported a huge 7.25 million barrel increase in crude inventories...prices held steady, gathered their forces and then forged higher," publisher Dennis Gartman wrote in his closely-followed newsletter for traders.
"Markets that rise on bearish news are impressive enough, but markets that rise on overtly bearish news are truly impressive. This is one such market."
U.S. oil demand in the past few weeks has posted its first year-on-year gain in 18 months, while Chinese imports are surging, reflecting sustained growth for the world's top two oil users.
Oil-product inventories in the U.S. have been shrinking. Stockpiles of distillate fuels including heating oil and diesel decreased by 1 million barrels last week to 147.5 million barrels, the industry-funded American Petroleum Institute (API) reported on Tuesday.[ID:nN30173189]
Gasoline stocks dropped by 946,000 barrels, falling to 223.2 million barrels, the API said. Crude supplies rose 421,000 barrels, compared with a Reuters survey forecasting an average increase of 2.4 million barrels.
QUARTERLY GROWTH
Oil prices this quarter have traded from a peak of $83.95 in January, the highest since October 2008 at the height of the financial crisis, to a low of $69.50 a barrel in February.
That sub-$15 range is more stable than the wide price swings in the previous two years. Implied volatility for U.S. crude is now at its lowest level since prices surged to a record $147.27 a barrel on July 11, 2008, before plummeting to $32.40 in December of that year.
For a graphic of crude implied volatility, see: here
Officials from the Organisation of the Petroleum Exporting Countries (OPEC) on Tuesday appeared undecided on how to respond if oil prices rose definitively above the $70-80 a barrel range they have praised this month. [ID:nN30208773]
Some major consumers at the biannual International Energy Forum (IEF) being held in Cancun, Mexico this week agreed with OPEC members' claims that a price of $70-80 price was good for both sides, providing sufficient revenues for producers and incentives to build new projects, but not so high as to choke off growth in importing nations. [ID:nN30208773]
The IEF aims to produce a statement when the meeting concludes on Wednesday outlining measures to minimize oil price volatility, including steps to increase market transparency. (Additional reporting by Alejandro Barbajosa in Singapore, editing by Amanda Cooper)
Source: http://uk.reuters.com/article/idUKSGE62U05S20100331?sp=true
By Chris Baldwin
LONDON, March 31 (Reuters) - Oil traded above $82 on Wednesday, heading for its fifth consecutive quarterly gain as markets awaited U.S. crude inventory data later in the day.
Front-month crude futures on the New York Mercantile Exchange CLc1 have gained almost 4 percent so far this year, trading at $82.44 a barrel at 0807 GMT, up 7 cents from Tuesday. Brent crude for May LCOc1 rose 3 cents to $81.31 in London.
A Reuters poll of 14 analysts showed U.S. crude oil inventories likely rose last week for the ninth straight time. Weekly government statistics from the Energy Information Administration will follow later on Wednesday.[ID:nN30173183]
"One week ago, the DOE reported a huge 7.25 million barrel increase in crude inventories...prices held steady, gathered their forces and then forged higher," publisher Dennis Gartman wrote in his closely-followed newsletter for traders.
"Markets that rise on bearish news are impressive enough, but markets that rise on overtly bearish news are truly impressive. This is one such market."
U.S. oil demand in the past few weeks has posted its first year-on-year gain in 18 months, while Chinese imports are surging, reflecting sustained growth for the world's top two oil users.
Oil-product inventories in the U.S. have been shrinking. Stockpiles of distillate fuels including heating oil and diesel decreased by 1 million barrels last week to 147.5 million barrels, the industry-funded American Petroleum Institute (API) reported on Tuesday.[ID:nN30173189]
Gasoline stocks dropped by 946,000 barrels, falling to 223.2 million barrels, the API said. Crude supplies rose 421,000 barrels, compared with a Reuters survey forecasting an average increase of 2.4 million barrels.
QUARTERLY GROWTH
Oil prices this quarter have traded from a peak of $83.95 in January, the highest since October 2008 at the height of the financial crisis, to a low of $69.50 a barrel in February.
That sub-$15 range is more stable than the wide price swings in the previous two years. Implied volatility for U.S. crude is now at its lowest level since prices surged to a record $147.27 a barrel on July 11, 2008, before plummeting to $32.40 in December of that year.
For a graphic of crude implied volatility, see: here
Officials from the Organisation of the Petroleum Exporting Countries (OPEC) on Tuesday appeared undecided on how to respond if oil prices rose definitively above the $70-80 a barrel range they have praised this month. [ID:nN30208773]
Some major consumers at the biannual International Energy Forum (IEF) being held in Cancun, Mexico this week agreed with OPEC members' claims that a price of $70-80 price was good for both sides, providing sufficient revenues for producers and incentives to build new projects, but not so high as to choke off growth in importing nations. [ID:nN30208773]
The IEF aims to produce a statement when the meeting concludes on Wednesday outlining measures to minimize oil price volatility, including steps to increase market transparency. (Additional reporting by Alejandro Barbajosa in Singapore, editing by Amanda Cooper)
Source: http://uk.reuters.com/article/idUKSGE62U05S20100331?sp=true
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