Start trading forex from zero we give you 5 usd as start


Oil firm as US reports stocks rose

Thursday, January 24, 2008

LONDON (Thomson Financial) - Oil prices held firm as US crude stocks rose in line with expectations last week.

Prices were some way off their day highs, however, as gasoline inventory rose higher than expectations and as oil remained vulnerable to wider financial market weakness.

Though more positive sentiment on the stock markets today had lifted oil's value by over a dollar earlier in the session, analysts said prices were still vulnerable to another push lower.

New York's main benchmark has lost around 12 pct since hitting a record 100.09 usd per barrel in the first week of January.

On Tuesday, the Federal Reserve unexpectedly slashed a key interest rate by a bold three-fourths of a percentage point on Tuesday, responding to a global plunge in stock markets that heightened concerns about a recession. The Fed signalled that further rate cuts were likely.

"We continue to see the urgent action more as confirmation that the economy is definitely slowing than as an immediate boost to petroleum demand prospects," said Citigroup analyst Tim Evans.

The emergency move marked the first time that the Fed has changed the funds rate between meetings since 2001, when the central bank was battling the combined impacts of a recession and the terrorist attacks.

In the week to Jan 18, crude oil stocks in the world's top consumer rose 2.3 mln barrels -- exactly in line with analysts' expectations, according to the US Energy Information Administration.

Gasoline inventory, meanwhile, rose by 5 mln barrels against calls for a 1.45 mln barrel-build. A larger than expected drop in distillate inventory including heating oil, which fell 1.3 mln barrels against an expected 350,000 barrel fall, went some way in supporting oil futures.

At 4.08 pm, New York's WTI crude for March delivery was up 14 cents at 87.13 usd.

In London, Brent crude for March delivery was up 35 cents at 88.97 usd per barrel.

WTI front month closed at its lowest price since October.

Elsewhere, the OPEC cartel, which pumps some 40 pct of the world's oil, is set to meet on Feb 1 in Vienna.

Ministers have said they do not believe market supply is limited. At its last meeting on Dec 5 in Abu Dhabi, the cartel chose to leave production levels unchanged, saying the market was "well supplied and commercial crude/product stocks remaining at comfortable levels".

OPEC ministers have been reiterating their view on the sidelines of the Davos, Switzerland economic conference. Qatari oil minister Abdullah al-Attiyah and Iraqi oil minister Hussain al-Shahristani both told reporters that there was no need for extra barrels.

Posted by MOHAMED SAID at 10:44 AM  


Post a Comment

My site was nominated for Best Business Blog! TopOfBlogs

Free Blog Counter

blog directory Business Top Finance blogs