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Oil prices decline

04 February 2010 07:34 (UTC +04:00)

Baku-APA-Economics. U.S. crude for March delivery was unchanged at $76.98 a barrel at 0501 GMT, while London ICE Brent shed 9 cents to $75.83. Prices are now around 48 percent below their July 2008 peak of more than $147, Reuters reported.

A government report Wednesday showed U.S. crude stockpiles rose more than expected as imports gained and refineries kept operating at unusually low rates.

Although manufacturing has shown a strong rebound, U.S. demand for distillate fuel, including diesel, plunged more than 9 percent in the four weeks to January 29 from a year earlier, according to the Energy Information Administration (EIA), part of the Department of Energy (DOE).

Total U.S. oil demand over the past four weeks declined 2 percent, showing no improvement from the corresponding period in the previous week’s report.

U.S. refinery utilization, the proportion of capacity under operation, last week fell by 0.8 percentage point to 77.7 percent of capacity. That was the lowest level since 1990 barring hurricane disruptions.

News this week that the Institute for Supply Management’s index rose to its highest since August 2004 raised expectations for a strong recovery in U.S. manufacturing.

Oil in New York has rebounded by more than $4 this week from a six-week low of $72.43 on January 29. But prices are still far from a 15-month high close to $84 reached on January 11.

U.S. non-farm payrolls are expected to have increased by 8,000 in January, the second monthly gain since the recession started in December 2007, according to the 20 forecasters who have given the most accurate predictions in recent Reuters polls. The data is due on Friday.

An unusually cold winter across the northern hemisphere helped drain some excess oil supplies from floating storage, but the nearing of spring may halt that process.

Stocks of crude oil and petroleum products stored on tanker ships around the world likely fell by 27 million barrels last month, reducing a floating supply overhang that has depressed oil and product prices, U.S. bank Goldman Sachs said Wednesday in a note to clients.

Goldman estimates that left a total of 98 million barrels of crude and 80 million barrels of products in floating storage as of end-January.

State-owned Chinese oil firm CNPC expects China’s crude oil imports to increase 9.1 percent to 212 million tones in 2010, or 4.24 million barrels per day, a company report showed on Thursday.