Home
News
In Focus
Business
Metro
Nation
World
Sports
Feature
Opinion
View more »Opinion Columns
Wan LixinOpinion deputy editor of Shanghai Daily
Restaurants get off to a quick start thanks to game-changing policies
High service charges on event ticket refunds call for further regulation
Sunday
- Subscribe
Related News
Energy prices fall before crude storage report
Source: Agencies |
May 6, 2009, Wednesday
|
Online Edition
Online Edition
OIL prices retreated from five-month highs yesterday, a day before the government is expected to report that crude storage levels have reached a new 19-year high.
Benchmark crude for June delivery fell 63 cents to settle at US$53.84 a barrel on the New York Mercantile Exchange.
Still crude prices have risen nearly 8 percent since last yesterday and gas prices have begun to tick upward as the driving season approaches and as refineries cut back on production.
Oil has traded near US$50 for more than a month as the worst global slump in decades undermined energy demand.
Hints of an economic recovery have pushed prices higher in recent weeks.
Federal Reserve Chairman Ben Bernanke told Congress yesterday that the economy should exit the recession and begin to grow later this year. That could lead to a rebound in energy prices.
Kloza said he wouldn't be surprised if crude prices flirt with US$60 before Memorial Day (May 25).
Dour economic reports have outweighed the positive for months, however, and part of the reason energy prices have been sustained at the current level is the weak dollar. Crude is priced in dollars, which makes it cheaper to buy when the dollar falls.
The U.S. currency has been weakened by the massive government bailout of banks and automakers.
The dollar fell less than a penny against the euro yesterday, but is down about 6 cents compared with the beginning of the year.
"Maybe it as simple as the fact that oil has more dollar value in a world where the U.S. government is running up a debt of historic proportions," analyst Phil Flynn said in a client note.
That would go a long way to explain why energy prices are not falling even further.
As trader and analyst Stephen Schork wrote yesterday, "You can't swing a cat without hitting a barrel of crude oil."
The Organization of Petroleum Exporting Countries meets May 28 to discuss a potential production cut. OPEC has announced 4.2 million barrels a day of output quota reductions since September, but left production levels unchanged at its last meeting in March.
The Energy Information Administration's weekly report on crude in storage is expected to show a continued build up on Wednesday for the week ending May 1.
Crude stocks rose 4.1 million barrels last week and the Strategic Petroleum Reserve has hit record levels and continues to grow, Schork noted.
Refiners have slashed production, so they are not taking in as much oil. That has led to some comparatively cheap gasoline, though prices are up slightly at the pump because of the cutbacks.
A gallon of regular unleaded gasoline is about US$1.53 a gallon cheaper in the U.S. than it was last year at this time.
In other Nymex trading, gasoline for June delivery fell 1.4 cents to settle at US$1.5722, while heating oil fell less than a penny to settle at US$1.4262 a gallon. Natural gas for June delivery dropped 11 cents to settle at US$3.615 per 1,000 cubic feet.
In London, Brent prices fell 46 cents to settle at US$54.12 a barrel on the ICE Futures exchange.
Benchmark crude for June delivery fell 63 cents to settle at US$53.84 a barrel on the New York Mercantile Exchange.
Still crude prices have risen nearly 8 percent since last yesterday and gas prices have begun to tick upward as the driving season approaches and as refineries cut back on production.
Oil has traded near US$50 for more than a month as the worst global slump in decades undermined energy demand.
Hints of an economic recovery have pushed prices higher in recent weeks.
Federal Reserve Chairman Ben Bernanke told Congress yesterday that the economy should exit the recession and begin to grow later this year. That could lead to a rebound in energy prices.
Kloza said he wouldn't be surprised if crude prices flirt with US$60 before Memorial Day (May 25).
Dour economic reports have outweighed the positive for months, however, and part of the reason energy prices have been sustained at the current level is the weak dollar. Crude is priced in dollars, which makes it cheaper to buy when the dollar falls.
The U.S. currency has been weakened by the massive government bailout of banks and automakers.
The dollar fell less than a penny against the euro yesterday, but is down about 6 cents compared with the beginning of the year.
"Maybe it as simple as the fact that oil has more dollar value in a world where the U.S. government is running up a debt of historic proportions," analyst Phil Flynn said in a client note.
That would go a long way to explain why energy prices are not falling even further.
As trader and analyst Stephen Schork wrote yesterday, "You can't swing a cat without hitting a barrel of crude oil."
The Organization of Petroleum Exporting Countries meets May 28 to discuss a potential production cut. OPEC has announced 4.2 million barrels a day of output quota reductions since September, but left production levels unchanged at its last meeting in March.
The Energy Information Administration's weekly report on crude in storage is expected to show a continued build up on Wednesday for the week ending May 1.
Crude stocks rose 4.1 million barrels last week and the Strategic Petroleum Reserve has hit record levels and continues to grow, Schork noted.
Refiners have slashed production, so they are not taking in as much oil. That has led to some comparatively cheap gasoline, though prices are up slightly at the pump because of the cutbacks.
A gallon of regular unleaded gasoline is about US$1.53 a gallon cheaper in the U.S. than it was last year at this time.
In other Nymex trading, gasoline for June delivery fell 1.4 cents to settle at US$1.5722, while heating oil fell less than a penny to settle at US$1.4262 a gallon. Natural gas for June delivery dropped 11 cents to settle at US$3.615 per 1,000 cubic feet.
In London, Brent prices fell 46 cents to settle at US$54.12 a barrel on the ICE Futures exchange.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
