(To see the day's top energy news click [TOP/O]) TOKYO, Aug 28 (Reuters) - U.S. crude oil futures rose for a
fourth straight session to stay above $118 a barrel on Thursday,
amid concerns Tropical Storm Gustav will intensify into a
major hurricane as it moves towards energy facilities in the Gulf
of Mexico. * Frontmonth U.S. crude for October delivery CLc1 was up 20
cents at $118.35 a barrel on the Globex electronic trading
platform, after settling up $1.88 at $118.15 on Wednesday. On Wednesday, the contract touched $119.63, the highest since
Friday. In the past three sessions, oil has risen $3.56. * Wednesday's gains came amid forecasts that Gustav was
projected to hit the U.S. Gulf Coast around Monday. Tropical Storm Gustav will strengthen into a major hurricane
and could force shut around 85 percent of U.S. oil and natural
gas production platforms in the Gulf of Mexico in the coming
days, private forecaster Planalytics said. [ID:nN27397216] Shell Oil Co, the U.S. Gulf of Mexico's largest producer,
said its oil production would be affected as early as Thursday as
it evacuates all workers from offshore operations.
[ID:nN27498737] * Earlier on Wednesday, government data also showed U.S.
crude inventories unexpectedly fell by 100,000 barrels, against
forecasts for a 1 million barrel build. Gasoline stocks fell by 1.2 million barrels, compared with a
forecast decline of 2.9 million barrels. Distillate stocks were
unchanged. [EIA/S] * September RBOB RBU8 led the gains on Wednesday, settling
up 3.3 percent at $3.0672 a gallon, amid fears of supply
disruption. September heating oil HOU8 on Wednesday ended up 1.6
percent at $3.2617 a gallon. * Traders were also eyeing the upcoming OPEC meeting and
escalating tensions between Russia and the West after U.S.
President George W. Bush condemned Russia for recognising
breakaway regions in Georgia. [ID:nN26346120]
To read the previous day's closing market report, click [O/R]
Diary of upcoming energy news and events -- [O/DIARY]
Oil prices as of 0009 GMT
Contract Mnth Price Change Day ago pct MA-20*
NYMEX Contracts
US Crude OCT8 $118.35 +0.20 +$1.88 +1.62% $117.61
Heat Oil SEP8 326.67 +0.50 +5.18 +1.61% 321.70
RBOB SEP8 0.00 +0.00 +9.75 +3.28% 294.16
Natgas OCT8 $8.520 -0.088 +$0.221 +2.64% $8.415
ICE Contracts
Brent OCT8 -- +0.00 +$1.59 +1.39% $116.33
Gasoil SEP8 -- +0.00 +$6.75 +0.65% $1045.90
Note: U.S. heating oil and RBOB gasoline contracts listed in
cents per gallon.
* = 20-day moving average for continuation month.
(Reporting by Osamu Tsukimori)
Wednesday, August 27, 2008
Oil rises as Gustav threatens U.S. Gulf
NEW YORK (Reuters) - Oil rose on Wednesday on forecasts that Tropical Storm Gustav will intensify into a hurricane as it ploughs toward the U.S. oil and natural gas platforms in the Gulf of Mexico.
Further support came from weekly U.S. government inventory
data that showed an unexpected drop in crude oil stockpiles in
the world's top consumer.
U.S. crude gained 77 cents to $117.04 a barrel by 1 p.m. EDT (1700 GMT), adding to two days of gains. London Brent crude traded up 57 cents to $115.20 a barrel.
Storm tracks showed Gustav churning toward the Gulf of Mexico, and forecaster Planalytics said 85 percent of U.S. oil and natural gas production in the region could be shut in.
Companies began pulling workers off rigs as weather models showed Gustav strengthening into a hurricane before it hits the Gulf, which pumps about a quarter of U.S. oil production and 15 percent of natural gas output.
If Gustav hits the Gulf as a Category 3 hurricane it would be the biggest storm to hit the region's oil infrastructure since hurricanes Katrina and Rita in 2005.
"After 2005, when a hurricane blows in, guys tend to prepare for the worst. It's a situation where simply you don't want to be the guy caught short, because someone will be," said Steve Mosby, vice president at ADMO Energy.
Analysts said U.S. companies could be forced to draw on oil inventories to make up for disruptions, after data from the U.S. Energy Information Administration showed U.S. crude stocks fell 100,000 barrels last week, against calls for a build.
Gasoline stocks fell 1.2 million barrels, less than forecasts for a 2.9 million barrel drawdown, while distillate inventories were unchanged.
Oil prices have tumbled from a record above $147 a barrel hit last month as high fuel prices and the wider economic problems hurt demand in the United States and Europe.
Traders were also eyeing the upcoming OPEC meeting and escalating tensions between Russia and the West after U.S. President George W. Bush condemned Russia for recognizing breakaway regions in Georgia.
OPEC will next meet on Sept. 9 to review output policy, and some analysts say top exporter Saudi Arabia may come under pressure from within OPEC's ranks to reduce supplies to prevent a further fall in crude prices.
Further support came from weekly U.S. government inventory
data that showed an unexpected drop in crude oil stockpiles in
the world's top consumer.
U.S. crude gained 77 cents to $117.04 a barrel by 1 p.m. EDT (1700 GMT), adding to two days of gains. London Brent crude traded up 57 cents to $115.20 a barrel.
Storm tracks showed Gustav churning toward the Gulf of Mexico, and forecaster Planalytics said 85 percent of U.S. oil and natural gas production in the region could be shut in.
Companies began pulling workers off rigs as weather models showed Gustav strengthening into a hurricane before it hits the Gulf, which pumps about a quarter of U.S. oil production and 15 percent of natural gas output.
If Gustav hits the Gulf as a Category 3 hurricane it would be the biggest storm to hit the region's oil infrastructure since hurricanes Katrina and Rita in 2005.
"After 2005, when a hurricane blows in, guys tend to prepare for the worst. It's a situation where simply you don't want to be the guy caught short, because someone will be," said Steve Mosby, vice president at ADMO Energy.
Analysts said U.S. companies could be forced to draw on oil inventories to make up for disruptions, after data from the U.S. Energy Information Administration showed U.S. crude stocks fell 100,000 barrels last week, against calls for a build.
Gasoline stocks fell 1.2 million barrels, less than forecasts for a 2.9 million barrel drawdown, while distillate inventories were unchanged.
Oil prices have tumbled from a record above $147 a barrel hit last month as high fuel prices and the wider economic problems hurt demand in the United States and Europe.
Traders were also eyeing the upcoming OPEC meeting and escalating tensions between Russia and the West after U.S. President George W. Bush condemned Russia for recognizing breakaway regions in Georgia.
OPEC will next meet on Sept. 9 to review output policy, and some analysts say top exporter Saudi Arabia may come under pressure from within OPEC's ranks to reduce supplies to prevent a further fall in crude prices.
Friday, August 15, 2008
Oil falls under $112 on bearish global demand
By Golnar Motevalli
LONDON (Reuters) - Oil dropped below $112 a barrel on Friday, down more than $2.50, to its lowest level since early May, pressured by faltering global demand, rising supply and a stronger dollar.
Crude has fallen sharply since reaching an all-time high of $147.27 a barrel on July 11 partly on concern about weakening demand. It fell as low as $111.85, the lowest since May 2, on Friday.
U.S. crude for September delivery was last trading down $2.77 at $112.24 a barrel by 1420 GMT. The contract will expire on Aug. 20. London Brent's new nearby contract, October, lost $2.52 to $111.16 a barrel.
"It looks like we might be trying to find a short term price floor. We've tested $114 and $113, we might well hover here for a little while before we make another move," Simon Wardell, oil analyst at Global Insight said.
"We might get to $110, how quickly we get there would depend on the demand outlook ... if next week's U.S. inventory data shows an increase in stocks, we could go lower," he added.
Supply has been rising as demand ebbs. Output from the Organization of the Petroleum Exporting Countries rose 145,000 barrels per day in July to 32.8 million bpd, the International Energy Agency said this week.
Oil also fell as the dollar strengthened following further proof that the U.S. economic slowdown is spreading. The economy of 15-nation euro zone contracted 0.2 percent in the second quarter, data showed on Thursday.
The euro hit a six-month low against the dollar on Friday. Weakness in the U.S. currency earlier this year had boosted the appeal of oil and commodities to investors as a hedge against inflation.
Fighting between Russia and Georgia, a key supply route from the Caspian to Europe, has lent support to oil. But analysts said diplomatic efforts to secure a peace accord reduced the risk of supply disruption.
U.S. President George W. Bush accused Russia on Friday of "bullying" Georgia and key European ally Germany criticised Moscow for going too far with its invasion of its small Caucasus neighbour.
LONDON (Reuters) - Oil dropped below $112 a barrel on Friday, down more than $2.50, to its lowest level since early May, pressured by faltering global demand, rising supply and a stronger dollar.
Crude has fallen sharply since reaching an all-time high of $147.27 a barrel on July 11 partly on concern about weakening demand. It fell as low as $111.85, the lowest since May 2, on Friday.
U.S. crude for September delivery was last trading down $2.77 at $112.24 a barrel by 1420 GMT. The contract will expire on Aug. 20. London Brent's new nearby contract, October, lost $2.52 to $111.16 a barrel.
"It looks like we might be trying to find a short term price floor. We've tested $114 and $113, we might well hover here for a little while before we make another move," Simon Wardell, oil analyst at Global Insight said.
"We might get to $110, how quickly we get there would depend on the demand outlook ... if next week's U.S. inventory data shows an increase in stocks, we could go lower," he added.
Supply has been rising as demand ebbs. Output from the Organization of the Petroleum Exporting Countries rose 145,000 barrels per day in July to 32.8 million bpd, the International Energy Agency said this week.
Oil also fell as the dollar strengthened following further proof that the U.S. economic slowdown is spreading. The economy of 15-nation euro zone contracted 0.2 percent in the second quarter, data showed on Thursday.
The euro hit a six-month low against the dollar on Friday. Weakness in the U.S. currency earlier this year had boosted the appeal of oil and commodities to investors as a hedge against inflation.
Fighting between Russia and Georgia, a key supply route from the Caspian to Europe, has lent support to oil. But analysts said diplomatic efforts to secure a peace accord reduced the risk of supply disruption.
U.S. President George W. Bush accused Russia on Friday of "bullying" Georgia and key European ally Germany criticised Moscow for going too far with its invasion of its small Caucasus neighbour.
Sunday, August 10, 2008
Oil's plunge powers rally on Wall Street
By Kristina Cooke
NEW YORK (Reuters) - U.S. stocks soared on Friday rounding out their best week in more than three months, as oil plunged below $115 a barrel, easing inflation concerns and improving prospects for business and consumer spending.
The slide in oil prices to their lowest level in three months powered the biggest rally in retailing shares in six years, with Home Depot (HD.N: Quote, Profile, Research) gaining 7.7 percent.
That eclipsed a steeper-than-expected quarterly loss from mortgage finance company Fannie Mae (FNM.N: Quote, Profile, Research).
In fact, financials rallied, helped by the view that lower inflation will make it easier for the Federal Reserve to put off interest-rate increases, at a time when the financial sector is still struggling with tighter credit conditions.
"We're at the lowest level in oil prices in months and there is a real feeling that the trend has turned," said Al Kugel, chief investment strategist at Atlantic Trust.
"Lower oil prices are good for businesses and good for consumers, for the inflation picture, and they will improve growth somewhere down the line. So it's 'win win.'"
The Dow Jones industrial average .DJI rose 302.89 points, or 2.65 percent, to 11,734.32, while the Standard & Poor's 500 Index .SPX jumped 30.25 points, or 2.39 percent, to 1,296.32. The Nasdaq Composite Index IXIC gained 58.37 points, or 2.48 percent, to 2,414.10.
For the week, the Dow gained 3.6 percent, the S&P 500 advanced 2.9 percent and the Nasdaq shot up 4.5 percent. It was the best week for all three indexes since April 20.
McDonald's Corp (MCD.N: Quote, Profile, Research) gave the biggest boost to the Dow after its July sales beat Wall Street's forecasts as its key U.S. market posted its largest gain in five months. Shares of the world's largest fast-food chain rose to an all-time high of $66.24. At the close, McDonald's stock was up 6.2 percent at $65.67 on the New York Stock Exchange.
Concerns about slowing European and Asian economies boosted the dollar and fed worries about lower demand for oil. U.S. front-month crude dropped more than $5 inpost-settlement trading to $114.62 a barrel -- more than 20 percent below its July record high.
Home Depot (HD.N: Quote, Profile, Research) rose 7.7 percent to $26.37, while an index of retail stocks .RLX rose 6.2 percent. The decline in fuel costs brightens the outlook for sales as it leaves consumers with more money to spend shopping.
General Electric (GE.N: Quote, Profile, Research) shares rose 3.8 percent to $29.64 while Procter & Gamble (PG.N: Quote, Profile, Research) gained 3.2 percent to $69.63.
Shares of Microsoft (MSFT.O: Quote, Profile, Research) climbed 2.7 percent to $28.13 and Cisco Systems (CSCO.O: Quote, Profile, Research) rose 2.8 percent to $24.25, signaling optimism about business spending.
An index of airline stocks .XAL, particularly sensitive to higher fuel costs, surged 8.1 percent.
Apple (AAPL.O: Quote, Profile, Research) shares rose 3.7 percent to $169.55 and gave the biggest boost to the Nasdaq, after a Credit Suisse analyst said in a note to investors that he sees solid growth for the Apple 3G iPhone "driven notably by its evolving economics -- iPhone now unlocked, greater subsidies leading to lower retail price and no geographic exclusivity."
Shares of MBIA Inc (MBI.N: Quote, Profile, Research) spurred gains in the financial sector after the world's largest bond insurer posted a higher-than-expected quarterly profit, helped by an accounting change that turned credit problems into a big gain. MBIA's shares rose 3.5 percent to $8.57.
But shares of Fannie Mae dropped 9.1 percent to $9.05 after the company posted a fourth straight quarterly loss and slashed its dividend by more than 85 percent to conserve capital.
Trading volume was low on the New York Stock Exchange, with about 1.24 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.23 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by 3 to 1 on the NYSE and by 2 to 1 on the Nasdaq.
(Additional reporting by Walter Brandimarte; Editing by Jan Paschal)
NEW YORK (Reuters) - U.S. stocks soared on Friday rounding out their best week in more than three months, as oil plunged below $115 a barrel, easing inflation concerns and improving prospects for business and consumer spending.
The slide in oil prices to their lowest level in three months powered the biggest rally in retailing shares in six years, with Home Depot (HD.N: Quote, Profile, Research) gaining 7.7 percent.
That eclipsed a steeper-than-expected quarterly loss from mortgage finance company Fannie Mae (FNM.N: Quote, Profile, Research).
In fact, financials rallied, helped by the view that lower inflation will make it easier for the Federal Reserve to put off interest-rate increases, at a time when the financial sector is still struggling with tighter credit conditions.
"We're at the lowest level in oil prices in months and there is a real feeling that the trend has turned," said Al Kugel, chief investment strategist at Atlantic Trust.
"Lower oil prices are good for businesses and good for consumers, for the inflation picture, and they will improve growth somewhere down the line. So it's 'win win.'"
The Dow Jones industrial average .DJI rose 302.89 points, or 2.65 percent, to 11,734.32, while the Standard & Poor's 500 Index .SPX jumped 30.25 points, or 2.39 percent, to 1,296.32. The Nasdaq Composite Index IXIC gained 58.37 points, or 2.48 percent, to 2,414.10.
For the week, the Dow gained 3.6 percent, the S&P 500 advanced 2.9 percent and the Nasdaq shot up 4.5 percent. It was the best week for all three indexes since April 20.
McDonald's Corp (MCD.N: Quote, Profile, Research) gave the biggest boost to the Dow after its July sales beat Wall Street's forecasts as its key U.S. market posted its largest gain in five months. Shares of the world's largest fast-food chain rose to an all-time high of $66.24. At the close, McDonald's stock was up 6.2 percent at $65.67 on the New York Stock Exchange.
Concerns about slowing European and Asian economies boosted the dollar and fed worries about lower demand for oil. U.S. front-month crude dropped more than $5 inpost-settlement trading to $114.62 a barrel -- more than 20 percent below its July record high.
Home Depot (HD.N: Quote, Profile, Research) rose 7.7 percent to $26.37, while an index of retail stocks .RLX rose 6.2 percent. The decline in fuel costs brightens the outlook for sales as it leaves consumers with more money to spend shopping.
General Electric (GE.N: Quote, Profile, Research) shares rose 3.8 percent to $29.64 while Procter & Gamble (PG.N: Quote, Profile, Research) gained 3.2 percent to $69.63.
Shares of Microsoft (MSFT.O: Quote, Profile, Research) climbed 2.7 percent to $28.13 and Cisco Systems (CSCO.O: Quote, Profile, Research) rose 2.8 percent to $24.25, signaling optimism about business spending.
An index of airline stocks .XAL, particularly sensitive to higher fuel costs, surged 8.1 percent.
Apple (AAPL.O: Quote, Profile, Research) shares rose 3.7 percent to $169.55 and gave the biggest boost to the Nasdaq, after a Credit Suisse analyst said in a note to investors that he sees solid growth for the Apple 3G iPhone "driven notably by its evolving economics -- iPhone now unlocked, greater subsidies leading to lower retail price and no geographic exclusivity."
Shares of MBIA Inc (MBI.N: Quote, Profile, Research) spurred gains in the financial sector after the world's largest bond insurer posted a higher-than-expected quarterly profit, helped by an accounting change that turned credit problems into a big gain. MBIA's shares rose 3.5 percent to $8.57.
But shares of Fannie Mae dropped 9.1 percent to $9.05 after the company posted a fourth straight quarterly loss and slashed its dividend by more than 85 percent to conserve capital.
Trading volume was low on the New York Stock Exchange, with about 1.24 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.23 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by 3 to 1 on the NYSE and by 2 to 1 on the Nasdaq.
(Additional reporting by Walter Brandimarte; Editing by Jan Paschal)
Oil rises over $1 on military conflict in Georgia
By Fayen Wong
PERTH (Reuters) - Crude oil topped $116 a barrel on Monday, rebounding from the previous session's decline on concern that fighting between Russia and Georgia could disrupt energy exports from the Caspian region.
U.S. light crude for September delivery was up 80 cents at $116 a barrel by 6:43 p.m. EDT, after rising as much as $1.19 earlier.
The contract had settled down $4.82 to $115.20 a barrel on Friday, before falling to $114.90 in post-settlement trade, the lowest level since early May.
London Brent crude rose 97 cents to $114.30.
"I think the military conflict in Georgia is the key factor in pushing up oil prices this morning. So much has happened so quickly since we first heard of Russia's attack last week," said David Moore, an analyst at the Commonwealth Bank of Australia in Sydney.
"I think there is also some degree of a technical rebound after oil's sharp fall on Friday."
The simmering conflict between Russia and its small, former Soviet neighbor Georgia erupted late on Thursday when Georgia sent forces into South Ossetia, a small pro-Russian province which threw off Georgian rule in the 1990s.
After a three-day battle in which Russia said 2,000 civilians were killed and thousands made homeless, Georgia offered Russia a ceasefire and peace talks on Sunday after pulling troops back from rebel South Ossetia's capital.
Oil prices were also supported by a pipeline blast in Turkey last week, which halted loadings of Azeri Light crude shipped to the Turkish port of Ceyhan.
A fire was still burning at the Baku-Tblisi-Ceyhan pipeline on Saturday and repairs may take one to two weeks or longer, sources at Turkey's state-owned pipeline company Botas said.
BP has cut output by at least 400,000 barrels a day at the Azeri-Chirag Gunashli oilfields because of the fire, traders said.
(Reporting by Fayen Wong)
PERTH (Reuters) - Crude oil topped $116 a barrel on Monday, rebounding from the previous session's decline on concern that fighting between Russia and Georgia could disrupt energy exports from the Caspian region.
U.S. light crude for September delivery was up 80 cents at $116 a barrel by 6:43 p.m. EDT, after rising as much as $1.19 earlier.
The contract had settled down $4.82 to $115.20 a barrel on Friday, before falling to $114.90 in post-settlement trade, the lowest level since early May.
London Brent crude rose 97 cents to $114.30.
"I think the military conflict in Georgia is the key factor in pushing up oil prices this morning. So much has happened so quickly since we first heard of Russia's attack last week," said David Moore, an analyst at the Commonwealth Bank of Australia in Sydney.
"I think there is also some degree of a technical rebound after oil's sharp fall on Friday."
The simmering conflict between Russia and its small, former Soviet neighbor Georgia erupted late on Thursday when Georgia sent forces into South Ossetia, a small pro-Russian province which threw off Georgian rule in the 1990s.
After a three-day battle in which Russia said 2,000 civilians were killed and thousands made homeless, Georgia offered Russia a ceasefire and peace talks on Sunday after pulling troops back from rebel South Ossetia's capital.
Oil prices were also supported by a pipeline blast in Turkey last week, which halted loadings of Azeri Light crude shipped to the Turkish port of Ceyhan.
A fire was still burning at the Baku-Tblisi-Ceyhan pipeline on Saturday and repairs may take one to two weeks or longer, sources at Turkey's state-owned pipeline company Botas said.
BP has cut output by at least 400,000 barrels a day at the Azeri-Chirag Gunashli oilfields because of the fire, traders said.
(Reporting by Fayen Wong)
Oil vulnerable as OPEC supply cushion thins - Iran
By Hashem Kalantari
TEHRAN (Reuters) - Rising OPEC output has cut the group's spare capacity and left the oil market vulnerable to any surprise supply disruptions, Iran's OPEC governor said on Sunday.
The Organization of the Petroleum Exporting Countries (OPEC) pumped more oil for the third consecutive month in July, helping to bring prices down $30 from a peak above $147 a barrel to a three-month low on Friday.
Rising OPEC output has coincided with a fall in demand from top energy consumer the United States, hit by an ailing economy and soaring pump prices.
"The drop in oil price has come at the expense of supply security," Iran's OPEC Governor Muhammad Ali Khatibi told Reuters by telephone.
Consuming countries benefiting from the price fall should be aware that it could easily be reversed by any surprise supply outages, he said.
"The drop in prices works in favour of consumers," Khatibi said. "But on the other hand, any drop in market security in the form of spare capacity is highly detrimental to consumers. We need excess capacity to guarantee supply security."
OPEC, source of over a third of the world's oil, had around 1.5 million barrels per day (bpd) of spare capacity to meet any disruptions, he said.
The dispute between Iran and the West over Tehran's nuclear programme has been the main focus of supply concern in oil markets as investors fear any conflict could threaten Iran's around 2.5 million bpd of exports. Iran is the world's fourth-largest exporter.
OPEC's Secretary General Abdullah al-Badri said in July it would be impossible to replace Iran's oil output in the case of disruption due to an attack.
Top oil exporter Saudi Arabia is the holder of most of the world's spare capacity. The kingdom pumped at the fastest rate for 27 years in July, boosting production without making any formal agreement with other OPEC members to boost the group's supply target.
Saudi output hit 9.7 million barrels per day (bpd), while its capacity stood at 11.3 million bpd.
Saudi Arabia has a long-held policy of keeping between 1.5 million bpd and 2 million bpd as a supply cushion.
Record fuel prices sparked protests worldwide this year and led to pressure from consuming countries on producers to boost output.
Khatibi said last week that the oil market was oversupplied by around 1.3 million bpd, but that a seasonal increase in global demand during the northern hemisphere winter should absorb the extra barrels.
TEHRAN (Reuters) - Rising OPEC output has cut the group's spare capacity and left the oil market vulnerable to any surprise supply disruptions, Iran's OPEC governor said on Sunday.
The Organization of the Petroleum Exporting Countries (OPEC) pumped more oil for the third consecutive month in July, helping to bring prices down $30 from a peak above $147 a barrel to a three-month low on Friday.
Rising OPEC output has coincided with a fall in demand from top energy consumer the United States, hit by an ailing economy and soaring pump prices.
"The drop in oil price has come at the expense of supply security," Iran's OPEC Governor Muhammad Ali Khatibi told Reuters by telephone.
Consuming countries benefiting from the price fall should be aware that it could easily be reversed by any surprise supply outages, he said.
"The drop in prices works in favour of consumers," Khatibi said. "But on the other hand, any drop in market security in the form of spare capacity is highly detrimental to consumers. We need excess capacity to guarantee supply security."
OPEC, source of over a third of the world's oil, had around 1.5 million barrels per day (bpd) of spare capacity to meet any disruptions, he said.
The dispute between Iran and the West over Tehran's nuclear programme has been the main focus of supply concern in oil markets as investors fear any conflict could threaten Iran's around 2.5 million bpd of exports. Iran is the world's fourth-largest exporter.
OPEC's Secretary General Abdullah al-Badri said in July it would be impossible to replace Iran's oil output in the case of disruption due to an attack.
Top oil exporter Saudi Arabia is the holder of most of the world's spare capacity. The kingdom pumped at the fastest rate for 27 years in July, boosting production without making any formal agreement with other OPEC members to boost the group's supply target.
Saudi output hit 9.7 million barrels per day (bpd), while its capacity stood at 11.3 million bpd.
Saudi Arabia has a long-held policy of keeping between 1.5 million bpd and 2 million bpd as a supply cushion.
Record fuel prices sparked protests worldwide this year and led to pressure from consuming countries on producers to boost output.
Khatibi said last week that the oil market was oversupplied by around 1.3 million bpd, but that a seasonal increase in global demand during the northern hemisphere winter should absorb the extra barrels.
Friday, August 8, 2008
US STOCKS-Wall Street jumps as oil drops
(Updates with market hitting session highs)
NEW YORK, Aug 8 (Reuters) - U.S. stocks rose on Friday as a further drop in oil prices buoyed hopes that inflation will ease, stimulating spending by businesses and consumers, which would restore corporate profit growth.
The slide in oil prices overshadowed news of a fourth straight quarterly loss from home finance company Fannie Mae (FNM.N: Quote, Profile, Research) , pointing to more fallout from the U.S. housing slump.
U.S. front-month crude CLc1 dropped $3.39 to $116.65 a barrel, more than $30 below its July record high.
The Dow Jones industrial average .DJI rose 54.39 points, or 0.48 percent, to 11,485.82. The Standard & Poor's 500 Index .SPX climbed 5.33 points, or 0.42 percent, to 1,271.40. The Nasdaq Composite Index .IXIC gained 19.11 points, or 0.81 percent, to 2,374.84. A short time later Nasdaq rose 1 percent. (Reporting by Ellis Mnyandu; Editing by Kenneth Barry)
NEW YORK, Aug 8 (Reuters) - U.S. stocks rose on Friday as a further drop in oil prices buoyed hopes that inflation will ease, stimulating spending by businesses and consumers, which would restore corporate profit growth.
The slide in oil prices overshadowed news of a fourth straight quarterly loss from home finance company Fannie Mae (FNM.N: Quote, Profile, Research) , pointing to more fallout from the U.S. housing slump.
U.S. front-month crude CLc1 dropped $3.39 to $116.65 a barrel, more than $30 below its July record high.
The Dow Jones industrial average .DJI rose 54.39 points, or 0.48 percent, to 11,485.82. The Standard & Poor's 500 Index .SPX climbed 5.33 points, or 0.42 percent, to 1,271.40. The Nasdaq Composite Index .IXIC gained 19.11 points, or 0.81 percent, to 2,374.84. A short time later Nasdaq rose 1 percent. (Reporting by Ellis Mnyandu; Editing by Kenneth Barry)
Oil falls as dollar rises, ignores Georgia conflict
By Margaret Orgill
LONDON (Reuters) - Oil fell $4 to below $116 on Friday in line with declines across the commodities complex as weaker demand and a stronger U.S. dollar outweighed concern conflict in Georgia could disrupt Caspian energy supplies.
U.S. light crude was down $3.50 at $116.52 a barrel by 10:30 a.m. EDT, up from an intraday low of $115.75.
London Brent crude fell by $3.52 to $114.34.
Oil has lost over $30, or nearly 20 percent, since hitting a record high of $147.27 in mid-July.
"It seems that we've got a lot of selling based on the stronger dollar," said Peter Beutel, president of trading consultants Cameron Hanover.
"Energy demand destruction and the dollar return have formed a quiet alliance to bring the oil market down, and today the louder of the two is the dollar."
The dollar rose to a seven-month high against the yen on Friday, helped by the drop in oil prices which boosted U.S. stocks.
Oil had rallied slightly on Thursday, driven upwards by the disruption of supplies through the Baku-Tblisi-Ceyhan pipeline following a blast earlier this week in Turkey.
The pipeline was still burning, halting loadings of Azeri Light crude shipped to the Turkish port of Ceyhan, but the fire could be extinguished on Friday or Saturday, a senior source told Reuters.
Once the blaze is out, the pipeline could be reopened within 10 days, the source said, but meanwhile BP has cut output by at least 400,000 barrels a day at the Azeri-Chirag Gunashli oilfields, traders said.
Analysts are concerned fighting in Georgia's breakaway South Ossetia region could lead to much wider disruption of exports from the Caspian region as Georgia is a major energy transit route.
Georgian troops backed by warplanes pounded separatist forces on Friday and Russia sent forces to repel the assault.
"In other circumstances, you might have expected it to push oil up $5," said John Kemp, economist at RBS Sempra. "I think it's an indication of how bearish the underlying sentiment is right now (that it hasn't)."
Bearishness has grown after oil prices fell through key technical support around $120 and as stocks of refined products have swollen, dragging down heating oil and diesel markets in Europe and the United States.
(Additional reporting by Barbara Lewis and Ikuko Kao in London and Felicia Loo in Singapore; editing by William Hardy)
LONDON (Reuters) - Oil fell $4 to below $116 on Friday in line with declines across the commodities complex as weaker demand and a stronger U.S. dollar outweighed concern conflict in Georgia could disrupt Caspian energy supplies.
U.S. light crude was down $3.50 at $116.52 a barrel by 10:30 a.m. EDT, up from an intraday low of $115.75.
London Brent crude fell by $3.52 to $114.34.
Oil has lost over $30, or nearly 20 percent, since hitting a record high of $147.27 in mid-July.
"It seems that we've got a lot of selling based on the stronger dollar," said Peter Beutel, president of trading consultants Cameron Hanover.
"Energy demand destruction and the dollar return have formed a quiet alliance to bring the oil market down, and today the louder of the two is the dollar."
The dollar rose to a seven-month high against the yen on Friday, helped by the drop in oil prices which boosted U.S. stocks.
Oil had rallied slightly on Thursday, driven upwards by the disruption of supplies through the Baku-Tblisi-Ceyhan pipeline following a blast earlier this week in Turkey.
The pipeline was still burning, halting loadings of Azeri Light crude shipped to the Turkish port of Ceyhan, but the fire could be extinguished on Friday or Saturday, a senior source told Reuters.
Once the blaze is out, the pipeline could be reopened within 10 days, the source said, but meanwhile BP has cut output by at least 400,000 barrels a day at the Azeri-Chirag Gunashli oilfields, traders said.
Analysts are concerned fighting in Georgia's breakaway South Ossetia region could lead to much wider disruption of exports from the Caspian region as Georgia is a major energy transit route.
Georgian troops backed by warplanes pounded separatist forces on Friday and Russia sent forces to repel the assault.
"In other circumstances, you might have expected it to push oil up $5," said John Kemp, economist at RBS Sempra. "I think it's an indication of how bearish the underlying sentiment is right now (that it hasn't)."
Bearishness has grown after oil prices fell through key technical support around $120 and as stocks of refined products have swollen, dragging down heating oil and diesel markets in Europe and the United States.
(Additional reporting by Barbara Lewis and Ikuko Kao in London and Felicia Loo in Singapore; editing by William Hardy)
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