Updated Tue Aug 25 16:40 ET
Full: NYMEX Oil Review: Higher in mixed session ahead of APIs
By Glen C. Carey, Bridge News
New York--Aug 25--NYMEX energy futures rose today in choppy trading
ahead of weekly US inventory data from the American Petroleum Institute.
Crude's early gains were trimmed by a decline Sep gasoline on inventory
concerns. Oct crude ended up 11 cents at $13.75. Sep heating oil ended up
49 points at 35.25c, while Sep gasoline ended down 42 points at 40.95c.
* * *
Oct crude was given an early boost by a false floor rumor of Saudi
Arabia King Fahd's death.
"People were talking about King Fahd," a broker said. "This helped give
us support but I don't know if it is even true."
According to Saudi Arabian state television, King Fahd left the
hospital today where he had been admitted for "tests" 4 days ago. The tests
were a follow-up to his gall bladder operation Aug 14.
Oct crude later slipped, pressured by a sagging Sep gasoline.
"Gasoline helped push us lower," a broker said. "We got a bounce on the
King Fahd story, and once it failed to materialize, traders were happy to
sell into higher numbers."
The contract dipped to a low of $13.55, right above support at $13.54,
then traded near to flat. Once the level held, the contract started to push
higher.
"Crude and heating oil didn't fall back too much today," a broker said.
"There was really no damage to their short-term uptrend."
Participants were reluctant to take any positions ahead of the weekly
inventory reports.
"People want something concrete to trade off of," a broker said.
Oct crude was also supported by the upcoming meeting Friday between
Venezuela, Mexico and Saudi Arabia. The three major oil producing nations
were expected to meet in Mexico to discuss oil prices and the oil market.
However, the meeting was postponed this afternoon until the near
future. It was not expected to produce any more pledges to cut production,
especially with sentiment growing in Venezuela against the existing output
cuts of 525,000 bpd amid a declining local currency.
Also, export concerns in Nigeria have been providing support to the Oct
contract. The 135,000-bpd Brass River oil terminal at Port Harcourt in
Nigeria has been occupied, suspending crude loading at the terminal.
And Shell International is still maintaining a force majeure at its
Nigerian Bonny and Forcados crude loading facilities.
OUTLOOK:
The direction the Oct crude takes Wednesday depends on inventory data
from the API and the US Department of Energy.
Concerns persist about supply conditions in the US, which could
underlined by data showing a significant build in crude and gasoline
stocks.
However, with neutral data, the market is expected to move the contract
higher, even with the slight fall today.
"Crude and heating oil didn't fall back too much today," a broker said.
"There was really no damage done to their short-term uptrend."
Support is pegged at $13.54, while resistance is seen at $13.89.
UPCOMING:
--US Department of Energy data on US inventory are released after 0900 ET
Wednesday.
--NYMEX Sep product options Wednesday, while Sep product futures expire Aug
31. Oct crude futures expire Sep 22; while Oct crude options go off the
board Sep 17.
--Mexico, Venezuela and Saudi Arabia have postponed Friday's meeting on the
oil markets until the near future.
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