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Crude Oil Futures Extend Friday’s Losses on Resurgent Dollar and Persistent Concerns over US Demand

14th Sep 2009, 1:34 pm Crude Oil Futures Extend Friday’s Losses on Resurgent Dollar and Persistent Concerns over US Demand

This morning’s resurgent dollar and persistent concerns over weakening US demand has seen Crude oil fall further below last week’s high of US$72/barrel. West Texas Intermediary (WTI) futures for October are currently trading around $68.50, after trading down towards $68 in the early hours of Monday.


 Last week’s better-than-expected industrial production in China and a relatively meek OPEC meeting supported the Oil price last week, however this mornings resurgent US Dollar has halted recent gains.


Friday’s inventory report from the Department of Energy had a mixed reception initially pushing oil higher, however despite crude inventory data showing a bigger than expected draw of 5.9 million barrels, US distillate stockpiles have reached their highest since 1983. WTI closed over 3% lower on the New York Mercantile Exchange.


The oil futures market is also being weighed down with analysts and traders anticipating a disappointment in tomorrows US consumer spending data , without including auto-sales, tomorrows data is expected to show little-to-no growth for August. With the US driving season over and a temperate fall expected, the US demand picture has analysts in hesitant mood.


UK listed oil majors British Petroleum (LSE:BP) and Royal Dutch Shell (LSE:RDSB) suffered this morning falling over 1.5% on Monday morning. Fellow tier one oil producers Cairn Energy (LSE:CNE) and Tullow Oil (LSE:LTW) we’re impacted further by falling crude prices losing over2.5% each.


Mid cap Heritage Oil (LSE: HOIL) was a bright spot, as it actually managed to stay above the opening level, outperforming its peers Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO), which followed the oil & gas majors and shed 1.3% and 1.6% respectively.


Junior oil companies have had mixed fortunes this morning, although they’ve generally traded marginally lower, Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) was the leading faller among the juniors in early trade with a 5.3% decline, though considering the huge increase in the share price of the company in recent weeks, the fall was marginal.


Diversified energy investment company Xtract Energy (AIM: XTR) also was in decline after selling part of its stake in Wasabi Energy (ASX: WAS), moving down almost 5%.

Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) and Kazakhstan operating Max Petroleum (AIM: MXP) both lost over 3%. PetroMatad (AIM:MATD) and Dominion Petroleum (AIM:DPL) also slipped.


Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) lead the few gainers in the AIM oil sector jumping over 11% around lunchtime.

North Sea explorers Xcite Energy (AIM & TSX: XEL) rose almost 5%, while Faroe Petroleum (AIM: FPM) jumped 15% after it announced a new gas discovery in the West Shetlands.  San Leon Energy (AIM: SLE) also rallied this morning, climbing around 8%.

 Meanwhile North American focused Nighthawk Energy (AIM:HAWK) gained more than 3% following news of a new ADR programme sponsored by Bank of New York Mellon, which is expected to expand it appeal to US investors.

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