OIL & GAS MARKET WRAP

The Oil and Gas wrap provides the latest oil prices from commodity exchanges in New York and London, gives a summary of the main corporate and macroeconomic news impacting the price of oil, a barometer of the strength of global economy.

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Thursday, February 02, 2012

US crude drops on inventories data

US crude drops on inventories data

Oil prices were headed in different directions today as US benchmark crude dropped amid signs of a decline in oil consuption in the US, while lingering concerns about the situation in Iran pushed up Brent crude in London.

Oil contracts in New York fell after an inventories report from the Department of Energy showed a buildup of 4.2 million barrels in US crude stockpiles, a sign that oil demand from the world’s largest energy consumer eased last week.

A survey by the Dow Jones Newswires forecast a gain of three million barrels.

The larger than expected increase in oil stocks offset an upbeat employment report from the US Department of Labor. The figures released this afternoon revealed a 12,000 decline to 367,000 in the number of initial applications for unemployment benefits for the week to January 29.

The data came a day after payrolls processor ADP said the private sector created 170,000 jobs in January and ahead of tomorrow’s closely followed non-farm payrolls data.

In the meantime, futures for Brent crude rose as traders feared that Iran could cut off oil supplies to Europe and possibly other customers.

Reports said today that three day talks Between Iranian officials and experts from the International Atomic Energy Agency (IAEA), which concluded on Tuesday, failed to result in any progress.

Iran has threatened to stop exporting crude to Europe immediately after the EU imposed an Iranian oil embargo last week.

The Middle Eastern country, which is accused of illegally developing a nuclear weapon, has delayed a vote on the matter. However, Iran said it would consider stopping oil shipments to “some countries”.

US light, sweet crude for March delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), declined US$1.12 to US$96.49/barrel in morning trade in New York.

March Brent crude rose 31 cents to trade at US$111.91/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Sefton Resources (LON:SER), up 9.5 percent at 2.35 pence at midday

Oilex (LON:OEX), up 7.5 percent at 14.11 pence

Urals Energy (LON:UEN), up 7.5 percent at 9 pence

Max Petroleum (LON:MXP), up 6 percent at 10.85 pence

Tower Resources (LON:TRP), up 6 percent at 4.02 pence

The top fallers were:

3Legs Resources (LON:3LEG), down 7.5 percent at 53.1 pence at midday

Forum Energy (LON:FEP), down 5.5 percent at 65.3 pence

Matra Petroleum (LON:MTA), down 4.5 percent at 0.692 pence

Mediterranean Oil & Gas (LON:MOG), down 4 percent at 5.04 pence

Kea Petroleum (LON:KEA), down 3.5 percent at 6.87 pence


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