Wonder if the EIA numbers will confirm that huge gas draw number from API?
Crude Oil Trades Near Two-Week High as Alliance Prepares Attacks in Libya
bloomberg.com
By Ayesha Daya - Mar 23, 2011 5:41 AM
Oil rose to its highest price in two weeks as the alliance enforcing a no-fly zone over Libya prepared to attack Muammar Qaddafi’s ground forces, raising concern that exports from the nation will remain disrupted.
Futures rose as much as 0.6 percent after U.S. Admiral Samuel Locklear said additional strikes will be launched in the “coming hours and days.” Prices have advanced 15 percent this year as protests that toppled the leaders of Tunisia and Egypt spread to Yemen, Bahrain and Syria. Credit Suisse Group AG raised its forecasts for Brent crude by 25 percent.
“The fear that no one knows how the crisis in Libya will develop over the next weeks or months is keeping the risk premium in oil prices,” said Sintje Diek, an analyst at HSH Nordbank in Hamburg. “We still have some upside risk if it becomes clear that there is a civil war in Libya, which has no quick solution, and there is still the fear of a spillover of tensions into big oil producers in the Persian Gulf.”
Crude oil for May delivery on the New York Mercantile Exchange rose as much as 65 cents to $105.62 a barrel, the front-month contract’s highest price since March 9, and was at $105.45 at 10:38 a.m. London time. Brent crude for May settlement rose 47 cents to $116.17 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 0.6 percent to $115.70 yesterday.
Credit Suisse raised its estimates for Brent crude for 2011 to an average of $105.80 a barrel and for West Texas Intermediate on the Nymex by 10 percent to $93.80 a barrel, the Zurich-based bank said in a note to clients today. The bank cited accelerating global demand growth and disruptions in output from the Middle East.
‘Considering All Options’
The alliance of nations enforcing the no-fly zone over Libya now is “considering all options” for using air power to protect civilians in battleground cities of Misrata, Ajdabiya and Zawiyah, Locklear told reporters at the Pentagon via telephone from his command ship in the Mediterranean Sea.
The Libya conflict, which began in February in the eastern city of Benghazi, is the bloodiest in a series of uprisings that have spread across the Middle East and ousted the leaders of Egypt and Tunisia. Yemen’s U.S.-backed president, Ali Abdullah Saleh, who has ruled for three decades, signaled he may yield to public demands he quit.
Crude oil and grains will be the top commodity performers this year as investors bet on supply disruptions, a Barclays Capital survey shows. Twenty-eight percent of investors polled this month said oil will gain the most this year, followed by corn and wheat. Gold, which gained 30 percent last year, may be “losing its shine” and ranked the worst performer for this year after natural gas, the bank said.
Japan Rebound
Japan, the world’s third-largest oil consumer, may see a rebound in the second half of this year, a Bloomberg News survey of economists showed. The nation may set up a reconstruction agency to oversee repairs after the March 11 earthquake.
The country’s strongest earthquake on record triggered a tsunami that killed thousands and damaged the Fukushima Dai-Ichi nuclear power plant. Tokyo Electric Power Co. began restoring electricity at the facility yesterday, easing concern there will be a nuclear meltdown.
“With the reconstruction process around the corner there will be some upward pressure in demand in Japan relatively to what it otherwise would have been,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, told Susan Li on Bloomberg Television’s “First Up.” “A marginal influence on the crude market will be a rise in oil plants fulfilling some of that lost capacity of nuclear, in terms of electricity generation.”
Refining Runs Increase
Japan’s refineries are processing more oil than expected, Vienna-based researcher JBC Energy GmbH said yesterday. The earthquake shut six refineries totaling about 29 percent of the country’s processing capacity, Bloomberg calculations based on Petroleum Association of Japan data show. Three of the plants remain closed, JBC analysts led by David Wech said in a note.
U.S. crude oil stockpiles rose 970,000 barrels to 350.8 million last week, according to the industry-funded American Petroleum Institute. An Energy Department report today may show inventories climbed 1.5 million barrels, rising for a third week, according to a Bloomberg News survey of analysts.
Crude supplies at the Cushing, Oklahoma, delivery point fell 143,000 barrels to 40.2 million, down from a record 4.36 million in the previous week, according to API.
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