Oil little changed before report forecast release

The U.S. Energy Department will probably report tomorrow that stockpiles grew by 1.5 million barrels in the week ended Nov. 20, according to a Bloomberg survey. Analysts were split over the change in supplies of distillate fuels such as heating oil and diesel, which are 28 percent above the seasonal average.

“At least until the end of the year we see US$80 as the top of the range,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Zurich.

Crude oil for January delivery traded for US$77.52 a barrel on the New York Mercantile Exchange, 4 cents lower, as of 11:16 a.m. London time. Oil, which rose as high as US$79.92 Monday, has failed to close above US$80 since Nov. 4. Futures have gained 73 percent this year.

Oil was capped by strengthening in the U.S. dollar, which often limits the appeal of commodities for hedging inflation. The dollar traded at US$1.4946 per euro at 11:15 a.m. in London, from US$1.4961 Monday in New York.

“The floor has been set by the weaker dollar, higher inflation theme, while the ceiling has been set by weak refining margins, and a global recovery that is expected to be sluggish,” said Mike Wittner, head of oil market research at Societe Generale SA in London.

Commercially held crude stockpiles in the U.S. climbed 1.5 million barrels in the week ended Nov. 20, from 336.8 million in the prior week, according to the median of 13 estimates from analysts polled. Eleven respondents forecast a gain and two said there would be a decline.

Brent crude oil for January delivery on London's ICE Futures Europe exchange advanced as much as 38 cents, or 0.5 percent, to US$77.87 a barrel. The contract was at US$77.77 a barrel at 11:14 a.m. London time.

Analysts were split over whether U.S. distillate supplies, a category that includes heating oil and diesel, rose or fell last week. Stockpiles probably dropped 100,000 barrels from 167.4 million the prior week, according to the survey. Seven respondents forecast a decline and six said supplies increased.

Gasoline inventories probably climbed 300,000 barrels from 209.1 million the week before, the survey showed. Refineries operated at 79.7 percent of capacity, up 0.3 percentage point from the previous week, according to the median of responses.

Oil declined for the third time in four days as the dollar strengthened against the euro, prompting traders to close trading positions before the long U.S. holiday weekend. The Energy Department report tomorrow may show the country's crude oil stockpiles had risen, possibly reaching a four-week high, bolstering concern fuel demand may have yet to recover.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email