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Oil rallies 4% as stockpiles decline - Friday Fuel Watch

1-Oct-2010

A second week of declines in crude oil stocks has prompted a rally in the oil price, with WTI crude trading near USD80 per barrel and North Sea Brent crude pushing past the psychological barrier. Crude prices are trading near a two-month high, with a weak US dollar making commodity investments more attractive. Prices have been trading in the low USD70-75 per barrel range for most of Sep-2010.

OPEC has announced it is satisfied with the price of oil where it is at the moment. Kuwait’s Oil Minister, Sheikh Ahmad al Abdullah al Sabah, confirmed that OPEC believes the market is oversupplied and that a change in OPEC production levels is likely.

US commercial crude oil stockpiles fell by 500,000 barrels to 357.9 million barrels. Petrol reserves also declined, down 3.5 million barrels to 222.6 million. US refinery capacity is at 85.8%, down 2 percentage points from the previous week and the lowest level since Apr-2010.

Even with the decline, US crude stockpiles remain well above historical averages, despite signs of increasing consumption. US gasoline consumption is up nearly 1% year-on-year. The supply-demand balance is expected to continue to tighten over 2H2010, with recovery in the global economy strengthening demand suggesting an upside for oil prices in 2011.

US crude oil stocks

US jet fuel stocks are also well beyond their historical average, although the stockpile increase has reached a plateau since Jun-2010.

In Europe, jet fuel price premiums over gasoline distillates have been decreasing, hitting a low point for the year this week, according to Reuters estimates. In Asia, the jet fuel spot premium has risen, up approximately USD0.10 to around USD0.55 per barrel.

US jet fuel stocks

For the week to 28-Sep-2010, WTI crude prices gained 4.4% to USD76.15 per barrel. Oil prices are 14.2% higher than at the same time last year.

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

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore: Sep-2009 to Sep-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): 21-Sep-2010 to 28-Sep-2010

 

21-Sep-10

22-Sep-10

23-Sep-10

24-Sep-10

27-Sep-10

28-Sep-10

one week Change

12 month Change

New York Harbor

215.5

214.21

214.09

216.9

215.64

214.87

-0.3%

27.7%

U.S. Gulf Coast

211.22

209.92

209.89

212.97

211.39

213.62

1.1%

24.8%

Los Angeles

217.5

216.71

216.09

221.47

219.64

219.87

1.1%

20.6%

Amsterdam-Rotterdam-Antwerp

214.75

214.53

214.38

215.81

212.41

213.85

-0.4%

20.8%

Singapore

211.43

209.29

207.86

210.05

210.71

208.33

-1.5%

22.5%

WTI Spot*

72.96

72.98

73.4

74.63

76.51

76.15

4.4%

14.2%

Jet fuel prices were steady, down marginally in New York and Amsterdam, and declining 1.5% in Singapore. US Gulf Coast and Los Angeles prices gained 1.1%.


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