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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (35514)	8/17/2005 3:39:49 PM
From: mishedlo	Respond to of 116555

KT see PM

To: Knighty Tin who wrote (35514)	8/17/2005 4:08:12 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Oil futures lower as dealers refuse to be phased by bullish US inventory data Wednesday, August 17, 2005 4:31:58 PM afxpress.com LONDON (AFX) - Oil futures slumped in afternoon deals, correcting as dealers refused to be phased by large falls in US gasoline stock piles as the high demand season will soon end, analysts said. At 4.49 pm, new front month October-dated Brent futures contracts were down 1.46 usd 63.60, well off Monday's record of 66.85 usd. Meanwhile, US benchmark September-dated contracts were down 1.53 usd 64.55, also well below the record 67.10 set on Monday. The US Department of Energy revealed US crude stocks were up a modest 300,000 barrels to 321 mln barrels, in line with analysts forecasts, for the week ending Aug 12. The American Petroleum Institute reported crude stocks were down 1.1 mln barrels. The DoE also reported gasoline stocks were down 5 mln barrels to 198 mln barrels, the API again reported a similar level of down 5.1 mln barrels. For distillate stocks, the DoE reported stocks were up 1.2 mln barrels to 131 mln barrels, and the API reported a higher 2.8 mln barrels. "The two sets of reports were alarmingly similar this week," said Fimat Futures analyst Mike Fitzpatrick. "Gasoline prices immediately bounced up on the news (of the large stock falls), but it wasn't enough to sustain the rally," he said. He added that with the imminent end to the 'summer driving season' dealers believed it was safe to assume there will not be a squeeze in supply within the next two weeks and were therefore unwilling to push prices any higher The focus now is beginning to switch to distillate stock levels. If distillate stocks continue to rise on a weekly basis then there is no fear of a squeeze in supply in winter, and oil prices will likely stablise in the coming weeks. Fitzpatrick said: "There are one or two spikes still to come, but today's reaction is a sign that the speculators have decided they have got all there is to get out of the oil bull run." Looking ahead, he said: "There is no fear of a price collapse as there are still factors that will underpin prices. For one the (US) hurricane season is not over and there could still potentially be production problems." Secondly, the outstanding issues in the Middle East. The Iraqi constitution is still not settled, and therefore there is still wrangling over the oil revenues. In addition, analysts said that Iran is another bone of contention, after President Bush refused last week to rule out the use of force against Iran over its resumption of nuclear activities Iran is the second-largest producer in OPEC after Saudi Arabia, producing over 4 mln barrels per day In other oil market news, Anglo-Dutch energy giant Royal Dutch Shell said it has shut down around 14,200 barrels of daily production after local communities in OPEC producer Nigeria surrounded its Agbada 1 flowstation, in the Niger Delta region. Investec analyst Bruce Evers said the field itself is small and provides 14,200 bpd. This could potentially become a problem if the unrest were to spread, and affect more of Shell's 1 mln bpd production in the country