Posted on 03/30/2005 8:07:34 AM PST by Pikamax
Oil Dives Below $53 as U.S. Stocks Swell Wednesday March 30, 10:55 am ET
LONDON (Reuters) - Oil prices dropped a dollar on Wednesday as U.S. inventory data showed a seventh straight weekly build in crude stocks and traders absorbed signs of slowing demand growth in China. ADVERTISEMENT
U.S. light crude (CLc1) fell $1.33 to $52.90 a barrel, more than $4.50 below an all-time peak of $57.60 on March 17. London Brent (LCOc1) was down 93 cents to $52.10 a barrel.
Prices dropped after the U.S. Energy Information Administration reported a 5.4 million barrels rise in crude inventories last week to 314.7 million barrels.
The crude stock build outweighed the impact of a 2.9 million barrels fall in gasoline stocks to 214.4 million.
"Very large import numbers on crude make all the difference in the world. The report is mildly constructive for products ... but overall this is roundly bearish for crude," Jan Stuart, analyst with Fimat USA bank.
Oil prices have risen 25 percent this year as dollar weakness has encouraged funds to switch money out of treasury markets and into commodities.
Rapid world demand growth has strained international supply but analysts say that oil demand growth in China, the world's No. 2 oil consumer, may also be slowing more sharply than expected.
Diesel exports have surged, gasoline shipments are on the rise and fuel oil imports remain below par, while commercial oil inventories are still unusually high after a wave of stockpiling in the last months of 2004.
"The market does not yet seem aware that Chinese demand, the principal engine of global growth, is showing clear signs of running out of steam," said Deborah White of SG Commodities.
"At $50 a barrel, we have reached the price level which adjusts demand to supply."
The OPEC producer cartel lifted its formal output ceiling by 500,000 bpd to 27.5 million bpd in mid-March in an effort to pump up second quarter global stocks, creating a cushion for anticipated robust fourth quarter demand.
OPEC President Sheikh Ahmad al-Fahd al-Sabah said on Tuesday the group does not need to increase oil production now but will need to raise supply by more than one million bpd for the third quarter.
Output from the Organization of the Petroleum Exporting Countries is close to a 25-year high and non-OPEC producers are pumping at full tilt, leaving little in the supply chain for any output hitch.
Keep fallin!
"The market does not yet seem aware that Chinese demand, the principal engine of global growth, is showing clear signs of running out of steam," said Deborah White of SG Commodities.
I wonder if the same analysts were saying last week when crude went to 57.00 that demand in China was the cause.
Just like the weatherman,they are 90% accurate when you count the forcast that says it will rain in 15 minutes to override the one from yesterday that predicted sunshine.
If only Jimmah Cahtah had understood.
As I predicted. Sadly, though, some folks will get burned by this. [suckers!]
Sell! Sell! Sell!
-Mortimer Duke
Ironically in England, where London is, the price of oil is also $53 a barrel. But, England is energy independent.
How could this be? HMMMMMMMM?
Ironically in England, where London is, the price of oil is also $53 a barrel. But, England is energy independent.
How could this be? HMMMMMMMM?
"crude went to 57.00 that demand in China was the cause."
I had read that this morning - China demand will cause oil prices to top 60 soon and keep going
ha you are right about the weatherman analogy
One would assume the price of gas should start going down, then? It actually reached an all-time high here (Indiana) of $2.28 a few days ago.
Oh yeah, it will go down all right. It will go down in about six weeks - for a day - and then the next crisis will drive it up immediately the next day.
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