re: FT on Crude Prices - destillates worry
news.ft.com
Crude edges back towards all-time highs
>By Neil Dennis
>Published: June 3 2005 10:23 | Last updated: June 3 2005 21:31
>>
With all the excitement surrounding the travails of the euro this week, it was barely noticed that the US benchmark crude oil price nudged back up to within $4 of its all-time high amid concerns over supply tightening later in the year.
Even though the latest weekly inventory data from the US showed crude stocks at levels not seen for nearly six years, speculators were not convinced that bullish story for oil prices was over.
Indeed, the biggest price movement this week came on Wednesday, a day ahead of the holiday-postponed inventory data, as petrol prices in the US moved higher in anticipation of a drawdown in stocks.
But petrol inventories staged a surprisingly strong rebound from the previous week as refinery output climbed to 96.2 per cent of capacity, and crude stocks rose as imports increased to 10.7m barrels a day.
The biggest shock came as supplies of distillates, like diesel and jet fuel, showed only moderate increases as the US government’s Energy Information Administration reported a 5 per cent year-on-year increase in demand for such products.
“Energy markets were unnerved by both the modest build in distillates and by the fact that US distillate demand is running at a very strong clip,” said Edward Meir at Man Financial. Demand for petrol, which usually drives the market this time of year, was shown to be running at just 1 per cent higher than last year – “a sobering statistic considering the currently high prices”, said Mr Meir.
By the close of trade in New York on Friday, Nymex WTI for July delivery was up $1.40 cents on the day to $55.03 a barrel, a 5.9 per cent increase on the week. Brent crude gained 6.6 per cent over the week to $54.17 a barrel.
Metals also pushed higher over the week. Gold benefited from the dramatic slide of the euro and was up 0.9 per cent over the week to $423.40.
Among the base metals, copper was the outstanding performer of the week, gaining more than 6 per cent over the five-day period to $3,270 a tonne on the London Metal Exchange.
“Inventory falls, from already low levels, and some recovery of the euro have added to the upside pressure on prices,” said Ingrid Sternby at Barclays Capital.
Aluminium was also higher, climbing 2.5 per cent on the week to $1,791 a tonne. |
