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Oil prices rally after falls, PetroChina forecasts 'drastic, high frequency' price fluctuations

27-Aug-2010

After six days of steady falls, oil prices have rallied late in the week, after threatening to go below USD70 per barrel. The interplay between the recovery of the US economy and oil prices continues, with better US jobless figures helping to trigger the late week rally.

A softening US dollar and better performance across global equity markets also helped the price of crude to bounce back above USD73 per barrel. 

Balancing this was another higher-than-expected increase in US oil inventories. Crude stockpiles surged 4.1 million barrels last week, against a forecast 200,000 barrel decline. Petrol and crude oil inventories are at 20-year highs in the US, with 1,140 million barrels of petrol and 358 million barrels of crude in the stockpile.

PetroChina, the largest oil company in Asia, forecasts that crude oil prices could continue their present instability. Oil prices may “fluctuate drastically with high frequency” in the near future, due to US currency fluctuations and speculation. PetroChina’s profits were up 71% year-on-year in 1Q2010, but 1H2010 profits gained only 29%, as government price caps on petrol and diesel reigned in earlier gains.

OPEC is expected to tighten crude shipments marginally from next month, cutting its exports by approximately 0.3%. The cut amounts to a reduction of approximately 70,000 barrels per day.

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

Jet fuel margins declined in concert with the three-week downwards trajectory for oil prices. Since early Aug-2010, prices have declined from approximately 227-220 cents per gallon to 202-197 cents per gallon this week. Los Angeles prices declined the most, down 4.3% to 200.55 cents. Amsterdam-Rotterdam-Antwerp prices also dell sharply, down 4.2%.

Crude oil prices are now marginally lower than they were 12 months ago, finishing the week to 24-Aug-2010 down 6%, at USD71.24 per barrel. Jet fuel prices are 1% to 4% higher than they were this time last year.

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore: 24-Aug-2009 to 24-Aug-2010

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): 17-Aug-2010 to 24-Aug-2010

 

17-Aug-10

18-Aug-10

19-Aug-10

20-Aug-10

23-Aug-10

24-Aug-10

one week Change

12 month Change

New York Harbor

207.66

207.7

206.91

205.24

202.89

202.3

-2.6%

4.1%

US Gulf Coast

205.91

207.45

205.66

203.74

200.64

198.23

-3.7%

3.3%

Los Angeles

209.66

210.2

208.66

206.74

202.64

200.55

-4.3%

0.8%

Amsterdam-Rotterdam-Antwerp

208.41

208.64

206.6

204.25

202.52

199.72

-4.2%

3.0%

Singapore

203.33

204.4

206.07

203.81

200.6

197.86

-2.7%

4.0%

WTI Spot*

75.76

75.39

74.45

73.45

72.71

71.24

-6.0%

-3.3%


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