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OIL FUTURES: Nymex Crude Rises To 2-Wk High January 24, 2007

Posted by notapundit in Economic News.

NEW YORK (Dow Jones)–Crude oil futures rose to a two-week high Wednesday, reversing losses build in gasoline stockpiles and surprise increase in distillates.

But the futures regained ground as traders weighed up other factors in the report and after U.S. oil giant ConocoPhillips (COP) said it has been told to cut back production in some OPEC-member nations.

The front-month March light, sweet crude contract on the New York Mercantile Exchange settled 33 cents, or 0.6%, higher at $55.37 a barrel, the highest settlement for a most active contract since Jan. 9. Brent crude on the ICE futures exchange rose 33 cents to $55.43 a barrel.

The EIA, which is statistics and analysis arm of the U.S. Energy Department, said gasoline stockpiles rose by 4 million barrels in the week ended Jan. 19, well above forecasts of a 1.1 million-barrel gain in a Dow Jones Newswires survey of analysts. Distillate stockpiles, which include heating oil and diesel, gained by about 700,000 barrels, compared with analysts’ expectations of a draw of that size.

While the gains in product stockpiles sent prices as low as $53.66 a barrel, traders said an unexpected 0.5 percentage point fall in refinery utilization, to 87.4%, and the biggest fall in crude imports since September 2005, increased price-positive sentiment.

“The (EIA) data wasn’t all that bearish, the drop in refinery utilization means we’ll likely have a drop in products” in coming weeks, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

February heating oil rose 76 points, or 0.5%, to $1.5839 a gallon. Front-month reformulated gasoline blendstock for oxygen blending, or RBOB, rose 1.43 cents, or 1%, to $1.4616 a gallon.

ConocoPhillips chief executive Jim Mulva said the company had received “very firm direction” on curbing output at operations in Libya and Venezuela, due to cutbacks mandated by the Organization of Petroleum Exporting Countries. The company said the OPEC-directed cuts will reduce first quarter 2007 production by 30,000 barrels a day and that some of the cuts are already in place.

“The ConocoPhillips story is another sign that OPEC is starting to comply more with cuts” that were announced last year, said Flynn.

OPEC has agreed to cut 1.2 million barrels a day of output from November 2006 and another 500,000 barrels a day from Feb. 1. Most analysts believe OPEC is falling short of its November commitment, let alone readying for an additional cut, thanks to non-compliance from some of the 11 member countries.

Analysts have noted prices are moving higher on bullish fundamental news but not as low on bearish news, a change in sentiment from the first three weeks of January, when crude prices plunged from more than $60 a barrel to a 20-month intraday low of $49.90 a barrel.

“That’s indicative of a market that may be oversold to the down side,” said Tom Bentz, an analyst and broker at BNP Paribas in New York. “It’s very possible the lows are in for a while.”

Following are prices for selected Nymex and ICE contracts and their comparison to values at the prior day’s settlement. Highs and lows include levels hit in overnight trade.

Prices for crude oil are in dollars a barrel and the change is in cents; prices for Nymex products are in cents a gallon and the changes are in points; prices for ICE gasoil are in dollars a ton and the change is in cents.

Nymex Prices:
Contract Settle Change Vs Low High
Mar crude oil 55.37 +33 53.66 55.45
Apr crude oil 56.16 +25 54.43 56.27
Feb heating oil 158.39 +76 154.20 158.70
Mar heating oil 159.63 +38 155.60 159.80
Feb RBOB 146.16 +143 141.00 146.90
Mar RBOB 149.41 +122 144.25 150.25

ICE Prices:
Contract Settle Change Vs Low High
Mar ICE Brent 55.43 +33 53.88 55.53
Apr ICE Brent 55.88 +20 54.32 55.99
Feb gasoil 490.00 +500 484.75 496.75
Mar gasoil 493.75 +525 489.00 500.00

By Matt Chambers, Dow Jones Newswires


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