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Oil falls back below USD75; oil and stock prices moving in tandem

20-Aug-2010

Oil prices fell below USD75/barrel this week, with the price of crude falling to its lowest level in five weeks, as equities fell and the US Energy Department reported that total US inventories of crude oil and petroleum products have climbed to their highest levels in 27 years, passing 1.13 billion barrels.

Oil futures prices, meanwhile, remain buoyant and well above the levels at which they were trading in Jul-2009, the last time stockpiles were at record amounts. This discrepancy between US inventory levels and oil prices underscores the growing role played by equities in dictating crude's direction.

The slump on Wednesday followed the first rise in five trading sessions on Tuesday as stock prices gained with better economic news – the US Government reported that wholesale prices increased last month for the first time since Mar-2010 and industry production levels in Jul-2010 exceeded economist expectations – easing concerns about the recovery. 

Oil and stock prices have moved almost in tandem in recent weeks as commodities investors look to the stock market for signs of where the economy is headed. After trading above USD82 a barrel last week, crude has retreated back between USD70 and USD80, pulled down by concerns about the broader economy.

Light, sweet crude for September delivery recently traded USD1.01, or 1.3%, lower at USD74.76 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded USD0.94 cents lower at USD75.99 a barrel.

WTI spot price (USD per barrel): 17-Aug-2009 to 17-Aug-2010

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore: 17-Aug-2009 to 17-Aug-2010

In other markets, jet fuel prices decreased during the week, with the largest reductions in Singapore (-5.3%) and Los Angeles (-4.7%), with prices in all markets (except WTI Spot) falling to settle in the USD203-210 range as at 17-Aug-2010, for a 12-month change in the 11-15% range. 

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore vs Crude Spot price (WTI, USD per barrel): 10-Aug-2010 to 17-Aug-2010

 

10-Aug-10

11-Aug-10

12-Aug-10

13-Aug-10

16-Aug-10

17-Aug-10

One week Change

12 month Change

New York Harbor

215.68

210.34

204.7

204.85

204.25

207.66

-3.7%

11.7%

U.S. Gulf Coast

214.05

208.34

202.7

204.23

202.5

205.91

-3.8%

12.5%

Los Angeles

220.05

213.84

208.2

208.1

206.25

209.66

-4.7%

14.1%

Amsterdam-Rotterdam-Antwerp

216.49

210.3

207.73

206.67

205.01

208.41

-3.7%

14.7%

Singapore

214.76

212.02

207.74

204.4

203.45

203.33

-5.3%

12.7%

WTI Spot*

80.24

78.09

75.68

75.39

75.17

75.76

-5.6%

13.5%


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