Oil tumbles below $60
Crude futures hit their lowest level since late December on healthy stockpiles; gasoline futures also sink.
Oil sank back below $60 a barrel and gasoline futures tumbled Tuesday as traders focused on the recent buildup in inventories.
U.S. light crude for March delivery lost $1.67, or about 2.7 percent, to settle at $59.57 a barrel on the New York Mercantile Exchange.
It was the first time since Dec. 30, 2005 the front-month crude futures contract fell below $60.
U.S. gasoline futures fell 5 cents to $1.38 a gallon, the lowest since mid-May 2005.
Rising supplies of gasoline in the United States and a collapse in margins for refineries producing the product to record-low levels have inspired selling.
But the situation may reverse itself as the upcoming maintenance season in the United States could slash refinery output.
"People will still watch gasoline because of maintenance and subsequent specification changes," Craig Pennington of Schroders said.
Analysts have said U.S. gasoline prices need to rise faster than oil prices to convince refiners to produce enough fuel for the upcoming U.S. driving season, and shoulder the cost of cleaner burning fuels being introduced this year.
So far, gasoline stocks in the United States are higher than a year ago and analysts polled by Reuters predict U.S. numbers to be released Wednesday will show gasoline stocks increased 1.5 million barrels last week.
Crude oil stocks are expected to rise 1.3 million barrels, adding to a year-on-year surplus.
Supplies from OPEC producer Nigeria, disrupted in January by militant unrest, are looking healthier.
The focus on the fundamentals of supply and demand is outweighing the politics that drove a strong rally in January, and worries about possible supply disruption from Iran, the world's fourth-biggest oil exporter, are easing.
"We're in a holding pattern. Geopolitics seem to have receded," Pennington said.
But that too could be temporary.
Tehran confirmed Tuesday it had restarted work on uranium enrichment, although it said it would take time to crank up to industrial-scale production.
The West fears Iran is attempting to build a nuclear weapon and the International Atomic Energy Agency (IAEA) has reported Iran to the U.N. Security Council, prompting concerns in the oil market that Iran might hold back its oil supplies in retaliation.
The IAEA will next meet to consider the issue in March.
Iran says its nuclear program is peaceful.
CNN
Oil sank back below $60 a barrel and gasoline futures tumbled Tuesday as traders focused on the recent buildup in inventories.
U.S. light crude for March delivery lost $1.67, or about 2.7 percent, to settle at $59.57 a barrel on the New York Mercantile Exchange.
It was the first time since Dec. 30, 2005 the front-month crude futures contract fell below $60.
U.S. gasoline futures fell 5 cents to $1.38 a gallon, the lowest since mid-May 2005.
Rising supplies of gasoline in the United States and a collapse in margins for refineries producing the product to record-low levels have inspired selling.
But the situation may reverse itself as the upcoming maintenance season in the United States could slash refinery output.
"People will still watch gasoline because of maintenance and subsequent specification changes," Craig Pennington of Schroders said.
Analysts have said U.S. gasoline prices need to rise faster than oil prices to convince refiners to produce enough fuel for the upcoming U.S. driving season, and shoulder the cost of cleaner burning fuels being introduced this year.
So far, gasoline stocks in the United States are higher than a year ago and analysts polled by Reuters predict U.S. numbers to be released Wednesday will show gasoline stocks increased 1.5 million barrels last week.
Crude oil stocks are expected to rise 1.3 million barrels, adding to a year-on-year surplus.
Supplies from OPEC producer Nigeria, disrupted in January by militant unrest, are looking healthier.
The focus on the fundamentals of supply and demand is outweighing the politics that drove a strong rally in January, and worries about possible supply disruption from Iran, the world's fourth-biggest oil exporter, are easing.
"We're in a holding pattern. Geopolitics seem to have receded," Pennington said.
But that too could be temporary.
Tehran confirmed Tuesday it had restarted work on uranium enrichment, although it said it would take time to crank up to industrial-scale production.
The West fears Iran is attempting to build a nuclear weapon and the International Atomic Energy Agency (IAEA) has reported Iran to the U.N. Security Council, prompting concerns in the oil market that Iran might hold back its oil supplies in retaliation.
The IAEA will next meet to consider the issue in March.
Iran says its nuclear program is peaceful.
CNN
posted by Ottawa Gas Prices | 3:04 PM
0 Comments:
Post a Comment
<< Home