Oil prices continued declining today despite a weaker US dollar, which slid against the euro after euro zone states agreed on a €30 billion rescue package for debt-laden Greece.
Crude prices hit 2010 highs at the beginning of the last week after US economic data that was released during the Easter holidays improved the demand outlook and inspired optimism among traders, helping US benchmark crude to above US$87/barrel, while Brent was steady above US$86/barrel. However, the prices got hit by inventories reports that showed further build-ups in US oil stockpiles, signalling weaker demand.
US Energy Information Administration (EIA) said that crude stockpiles added 2 mmbbls (million barrels) in the previous week. According to data from the American Petroleum Institute (API) US inventories added 1.1 mmbbls.
This week’s inventories updates from the API and EIA are due on Tuesday and Wednesday respectively.
Crude got some support from China, which has said that its oil imports rose 40% year on year in Q1 2010.
May Brent Crude retreated to US$84.88/barrel, while US light, sweet crude moved down to US$84.31/barrel on the New York Mercantile Exchange (NYMEX).
Blue chip oil and gas producers didn’t show much movement today. Cairn Energy (LSE: CNE) and Tullow Oil (LSE: TLW) posted small losses, as did BP (LSE: BP), while fellow supermajor Shell (LSE: RDSB) was flat. BG Group (LSE: BG) added less than 1%.
Amec (LSE: AMEC) was flat, while another oil and gas engineering group Petrofac (LSE: PFC) posted a marginal loss.
JKX Oil & Gas (LSE: JKX) advanced 3% to take the lead among the midcaps. Salamander Energy (LSE: SMDR) and Dragon Oil (LSE: DGO) followed, climbing 2% and 1.5% respectively. Premier Oil (LSE: PMO) added 1%. Dana Petroleum (LSE: DNX) tacked on a marginal gain.
Soco International (LSE: SIA) was flat, while Heritage Oil (LSE: HOIL) and Melrose Resources (LSE: MRS) lost less than 1%.
Wood Group (LSE: WG) lost nearly 1%, while fellow services company Wellstream Holdings (LSE: WSM) was flat.
Iraq operating Irish oil company Petrel Resources (AIM: PET) led the juniors, surging 8%. Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) also did well, adding 5%.