Gold9472
11-21-2007, 08:48 AM
Oil close to 100 usd/bbl as dollar collapses; eyes on US inventory data
http://www.forbes.com/markets/feeds/afx/2007/11/21/afx4362789.html
11.21.07, 5:39 AM ET
LONDON (Thomson Financial) - Oil rose close to 100 usd/bbl having hit a record high price earlier as the dollar sank to new depths against major currencies -- making commodities denominated in the greenback cheaper for those trading in other currencies.
Currency factors have attracted a fresh wave of investment and the likelihood of oil topping 100 usd is back on the cards.
At 10.18 am, New York WTI crude for January delivery was up 33 cents at 98.36 usd/bbl, having hit a record high of 99.29 usd.
Meanwhile, London's Brent crude for January delivery was trading up 23 cents at 95.72 usd/bbl having hit its all-time peak price of 96.53 usd/bbl earlier today.
'The latest move comes against a backdrop of concerns of tight winter supply and geopolitical concerns,' said Bank of Ireland (nyse: IRE - news - people ) analyst Paul Harris (nyse: HRS - news - people ).
Also, at an OPEC summit over the weekend, Venezuelan and Iranian officials discussed the possibility of trading oil in currencies other than the dollar because given the greenback's latest weakness members' purchasing power is eroded.
Harris said as long as oil is priced in dollars its unlikely the cartel would raise production because such a move would possibly push oil prices down -- decreasing further the group's purchasing power.
'This factor has been seized upon by speculators who have pushed the oil price further towards the 100 usd level,' said Harris.
The dollar hit a new record low of around 1.485 this morning after the US Federal Reserve last night cut its economic growth forecast for next year to 1.80-2.50 pct from its June estimate of 2.50-2.75 pct, while inflation is now expected to slow to 1.8 pct from around 2.95 pct this year.
Looking ahead, all eyes will be fixed on weekly US petroleum inventory data due at 3.30 pm London Time.
Analysts reckon that in the week to Nov 16 crude oil stocks rose by 1 mln barrels, gasoline inventories rose to 460,000 barrels and distillates fell by 500,000 barrels.
'While seasonal supplies of distillate, both diesel and heating oil, appear in good shape as the fall harvest peaks and the winter heating season looms, gasoline is, and will remain tight through fall turnarounds and into the holiday demand season,' said Stephen Schork, editor of The Schork report -- a daily trading note.
The market also expects the data to show refinery utilisation increased by 0.40 percentage points to operate at 88.1 pct of their operable capacity last week.
http://www.forbes.com/markets/feeds/afx/2007/11/21/afx4362789.html
11.21.07, 5:39 AM ET
LONDON (Thomson Financial) - Oil rose close to 100 usd/bbl having hit a record high price earlier as the dollar sank to new depths against major currencies -- making commodities denominated in the greenback cheaper for those trading in other currencies.
Currency factors have attracted a fresh wave of investment and the likelihood of oil topping 100 usd is back on the cards.
At 10.18 am, New York WTI crude for January delivery was up 33 cents at 98.36 usd/bbl, having hit a record high of 99.29 usd.
Meanwhile, London's Brent crude for January delivery was trading up 23 cents at 95.72 usd/bbl having hit its all-time peak price of 96.53 usd/bbl earlier today.
'The latest move comes against a backdrop of concerns of tight winter supply and geopolitical concerns,' said Bank of Ireland (nyse: IRE - news - people ) analyst Paul Harris (nyse: HRS - news - people ).
Also, at an OPEC summit over the weekend, Venezuelan and Iranian officials discussed the possibility of trading oil in currencies other than the dollar because given the greenback's latest weakness members' purchasing power is eroded.
Harris said as long as oil is priced in dollars its unlikely the cartel would raise production because such a move would possibly push oil prices down -- decreasing further the group's purchasing power.
'This factor has been seized upon by speculators who have pushed the oil price further towards the 100 usd level,' said Harris.
The dollar hit a new record low of around 1.485 this morning after the US Federal Reserve last night cut its economic growth forecast for next year to 1.80-2.50 pct from its June estimate of 2.50-2.75 pct, while inflation is now expected to slow to 1.8 pct from around 2.95 pct this year.
Looking ahead, all eyes will be fixed on weekly US petroleum inventory data due at 3.30 pm London Time.
Analysts reckon that in the week to Nov 16 crude oil stocks rose by 1 mln barrels, gasoline inventories rose to 460,000 barrels and distillates fell by 500,000 barrels.
'While seasonal supplies of distillate, both diesel and heating oil, appear in good shape as the fall harvest peaks and the winter heating season looms, gasoline is, and will remain tight through fall turnarounds and into the holiday demand season,' said Stephen Schork, editor of The Schork report -- a daily trading note.
The market also expects the data to show refinery utilisation increased by 0.40 percentage points to operate at 88.1 pct of their operable capacity last week.