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Wan LixinOpinion deputy editor of Shanghai Daily
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Crude oil settles below US$50 a barrel
Source: Agencies |
April 15, 2009, Wednesday
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Online Edition
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OIL prices settled below US$50 a barrel yesterday, as stock markets lost ground on signs the economic recovery may not be as close as some thought.
The government, meanwhile, said drivers hitting the road this summer will pay far less for gasoline than they did last summer when prices hit a record US$4.11 a gallon.
Benchmark crude for May delivery lost 64 cents to settle at US$49.41 a barrel on the New York Mercantile Exchange.
Oil prices have traded near US$50 a barrel for the last two weeks after jumping from below US$35 in February as investors struggle to gauge the health of a global economy reeling from the longest recession in the U.S. since World War II.
"Everything we've seen today confirms the bearish view," said Addison Armstrong of Tradition Energy.
The Energy Information Administration yesterday predicted that regular-grade gasoline will average US$2.23 a gallon through September. The monthly average figures to peak at US$2.30 a gallon, a bargain compared with last summer, when gasoline cost an average US$3.81 a gallon.
During the driving season - from April 1 to Sept. 30 - gasoline consumption is forecast to increase by 1 percent to 9.1 million barrels a day. Last summer oil hit US$147 a barrel and hurricane-related distribution problems in September kept drivers away from the pump.
The EIA said total U.S. consumption of liquid fuels in 2008 declined by almost 1.3 million barrels a day, or 6.1 percent, from 2007 and is expected to fall by another 430,000 barrels a day, or 2.2 percent, this year.
Phil Flynn of Alaron Trading Corp. said it was impressive that oil prices were holding up given the weak EIA report and a stock market that was down about 1 percent.
"It's probably not as a bad as what the market prepared for," he said of the report.
The government also said production in the U.S. should climb by 440,000 barrels a day to 5.4 million barrels in 2009, the first increase since 1991.
Consumption of natural gas is expected to decline by 1.8 percent this year, with a 7.4 percent drop in the industrial sector due to the weak economy, according to EIA.
After hitting US$13.69 per 1,000 cubic feet last summer, natural gas prices have plummeted to below US$4. Prices rose 6.1 cents to settle at US$3.689 per 1,000 cubic feet yesterday.
"Commercial and industrial demand is limping along, space heating demand is winding down," said trader and analyst Stephen Schork in his daily report. "As such, the NYMEX continues to grind lower."
Lower natural gas prices could be good news for consumers. Some people are already locking in lower prices ahead of the next heating season.
Traders also are focused on weekly petroleum inventory data that the EIA will release Wednesday. Analysts expect a build of 2.5 million barrels in crude stocks, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Crude stocks already are at 16-year highs.
Analysts also see gasoline stocks falling by 960,000 barrels and stocks of diesel fuel and heating oil shrinking by 1.1 million barrels. Refinery utilization is expected to edge up 0.15 percentage point to 81.95 percent.
In other Nymex trading, gasoline for May delivery lost 0.56 cent to settle at US$1.4576 a gallon and heating oil added 0.43 cent to settle at US$1.423 a gallon.
In London, Brent prices fell 18 cents to settle at US$51.96 a barrel on the ICE Futures exchange.
The government, meanwhile, said drivers hitting the road this summer will pay far less for gasoline than they did last summer when prices hit a record US$4.11 a gallon.
Benchmark crude for May delivery lost 64 cents to settle at US$49.41 a barrel on the New York Mercantile Exchange.
Oil prices have traded near US$50 a barrel for the last two weeks after jumping from below US$35 in February as investors struggle to gauge the health of a global economy reeling from the longest recession in the U.S. since World War II.
"Everything we've seen today confirms the bearish view," said Addison Armstrong of Tradition Energy.
The Energy Information Administration yesterday predicted that regular-grade gasoline will average US$2.23 a gallon through September. The monthly average figures to peak at US$2.30 a gallon, a bargain compared with last summer, when gasoline cost an average US$3.81 a gallon.
During the driving season - from April 1 to Sept. 30 - gasoline consumption is forecast to increase by 1 percent to 9.1 million barrels a day. Last summer oil hit US$147 a barrel and hurricane-related distribution problems in September kept drivers away from the pump.
The EIA said total U.S. consumption of liquid fuels in 2008 declined by almost 1.3 million barrels a day, or 6.1 percent, from 2007 and is expected to fall by another 430,000 barrels a day, or 2.2 percent, this year.
Phil Flynn of Alaron Trading Corp. said it was impressive that oil prices were holding up given the weak EIA report and a stock market that was down about 1 percent.
"It's probably not as a bad as what the market prepared for," he said of the report.
The government also said production in the U.S. should climb by 440,000 barrels a day to 5.4 million barrels in 2009, the first increase since 1991.
Consumption of natural gas is expected to decline by 1.8 percent this year, with a 7.4 percent drop in the industrial sector due to the weak economy, according to EIA.
After hitting US$13.69 per 1,000 cubic feet last summer, natural gas prices have plummeted to below US$4. Prices rose 6.1 cents to settle at US$3.689 per 1,000 cubic feet yesterday.
"Commercial and industrial demand is limping along, space heating demand is winding down," said trader and analyst Stephen Schork in his daily report. "As such, the NYMEX continues to grind lower."
Lower natural gas prices could be good news for consumers. Some people are already locking in lower prices ahead of the next heating season.
Traders also are focused on weekly petroleum inventory data that the EIA will release Wednesday. Analysts expect a build of 2.5 million barrels in crude stocks, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Crude stocks already are at 16-year highs.
Analysts also see gasoline stocks falling by 960,000 barrels and stocks of diesel fuel and heating oil shrinking by 1.1 million barrels. Refinery utilization is expected to edge up 0.15 percentage point to 81.95 percent.
In other Nymex trading, gasoline for May delivery lost 0.56 cent to settle at US$1.4576 a gallon and heating oil added 0.43 cent to settle at US$1.423 a gallon.
In London, Brent prices fell 18 cents to settle at US$51.96 a barrel on the ICE Futures exchange.
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