Bourse

Home page

Bourse

Oil price goes up slightly

21 January 2010 08:59 (UTC +04:00)

Baku â€“ APA-Economics. Crude oil futures rose slightly in Asia Thursday, recovering only a sliver of the ground lost overnight on pervasive concerns that monetary tightening in China will slow its economy, Dow Jones reported.
Prices gained a few cents after China reported December industrial production up 18.5% from a year earlier, but investors weren’t ready to reverse the broad sell-off that has hit commodities this week.
"Possible Chinese economic policy shifts appear to be dislodging some fund long positions from the market," said Jim Ritterbusch at Ritterbusch & Associates.
New York Mercantile Exchange light, sweet crude futures for delivery in March traded at $78.04 a barrel at 0726 GMT, up 30 cents in the Globex electronic session. March Brent crude on London’s ICE Futures exchange was up 11 cents at $76.43 a barrel.
Energy market participants are keenly watching for any signals that the world’s third largest economy may not be recovering from global recession at the pace expected, which could negatively impact crude demand in the year ahead.
While talk of tighter monetary policy continues to spook the market, there are no obvious signs China’s thirst for oil is abating. Data issued Thursday show that China crude runs hit a record in December as Beijing urged refiners to raise output in order to meet strong winter demand. This year will be another record year for crude runs as new China Petrochemical Corp. refineries at Tianjin, Qingdao and Fujian ramp up output, while PetroChina’s 208,000-barrel-a-day Qinzhou refinery will start commercial production in June.
The stronger dollar is also weighing on oil prices, FOREX.com analyst Jane Foley said. "The rise in the U.S. dollar can also be linked to China insofar as risk appetite has been reined in, and the dollar and the Japanese yen have benefited from their safe-haven status," she said.
Oil market participants are looking ahead to the U.S Department of Energy inventories data expected at 1600 GMT, a day later than normal following the U.S public holiday Martin Luther King day on Monday.
Crude oil inventories are seen rising to 1.9 million barrels, according to a survey of analysts by Dow Jones Newswires, after the American Petroleum Institue reported a draw of 1.8 million barrels Tuesday.
Last week, the DOE reported a large increase in total crude inventories to 331,026 million barrels, bringing the January average to 1.4% below last year, but 10.6% above the 2004-2008 average.
"All told it was bad news for the bulls," said Stephen Schork who added that the March Nymex contract has dropped 4.2% since inventories data was released.
Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--fell 28 points to 204.37 cents a gallon, while February heating oil traded at 202.79 cents, 68 points higher.
At 0700 GMT, ICE gasoil for February was at $617.25 a metric ton, up $3 from Wednesday’s settlement. wsj