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Oil : Mobashar says September too late
Oil prices held steady on Wednesday on new weekly statistics showing gasoline stocks in the United States have begun to be replenished. The latest report from the American Petroleum Institute (API) said US gasoline stock rose by 2.60 million barrels last week, almost halving a year on year supply deficit to 4.80 million barrels from eight million in the previous seven days.
US benchmark gasoline futures, which rose near to post Gulf War peaks on Tuesday, slid 1.21 cents lower in electronic dealings to $ 1.0570 a gallon. Crude prices, however, were little changed with North Sea bellwether Brent trading down 7 cents to $ 26.235 a barrel and US light crude at $ 26.80.
The API report offered some comfort to American motorists, who face a replay of last summer's supply crunch, when pump prices spiked to record levels during the peak demand driving season. The industry group pegged Us gasoline stocks at 195.71 million barrels and crude inventories at 313.7 million barrels a, making 1.50 million barrels draw in the week to 20 April.
Gasoline tanks were bolstered by a two percent increase in refinery production rates to 94.60 %. The API figures, released after the market close of New York business, showed Tuesday's run up on gasoline came after a fire at a Tesco refinery in Los Angeles - the latest of a series of glitches at plants in the US and Europe that have deepened concerns of a supply shortfall of driving fuel.
Mobashar Ahmed, futuresdata.net's Chief Analyst, said the API's gasoline build might trigger some profit taking, but declines would likely be capped by draws in stocks of crude, anti smog gasoline and distillates. Looking forward to winter supplies, the head of the energy Agency on Tuesday urged the OPEC producers' cartel to raise crude output son to avoid supply problems when demand picks up later in the year.
The OPEC Secretary General said on Monday he did not expect OPEC to raise output before September. "September is too late in terms of supplies for the winter. It is during the third quarter of the year that refiners need to buy their crude oil," Mobashar Ahmed said.
Mobashar bullish on gasoline for 2/3 weeks
Oil prices cooled off on Wednesday, trading steady as fresh industry data showed swollen United States crude oil inventories and a slim but surprising build in gasoline tanks. Mobashar Ahmed, Chief Analyst for futuresdata.net, said fund buying and persistent worries over gasoline stocks level ahead of the peak demand summer driving season in the US would keep prices strong - even if futures dip.
North Sea bellwether Brent stood 6 cents higher at $ 26.60 s barrel, after a rally powered by fund buying pushed the contract up by $ 1.20 on Tuesday. US light crude traded 31 cents lower at $ 28.17. "The price might come off a little, but the funds will keep it strong," said Mobashar Ahmed. "Gasoline is still strong. I am bullish on gasoline over the next two weeks," he added.
Fresh data from the EIA released on Wednesday gave the market a little new direction, because it was mostly in line with Tuesday night's API figures. The EIA said US crude stocks gained 32.92 million barrels last week, confirming the API's report of a 4.70 million barrels build. The API reported a rise in crude stocks for the fifth straight week, taking tanks to the highest levels since US gasoline stocks grew by 900,000 barrels for the week ending 06 April.
The API recorded a 315,000 rise with US gasoline tanks to 192.50 million barrels - the first build in motor fuel in seven weeks and bucking market expectations of a renewed draw. But the year on year deficit in gasoline stocks widened to 11.50 million barrels, offering little comfort to American drivers who face a possible replay of 2000's summer supply crunch, when pump prices hit record levels.
Anxiety over low gasoline inventories in the US has been a driving force behind strong crude futures prices.
Latest figures in Europe also showing swelling oil stocks in Europe, which have also widened the surplus over last year's slim inventories. Stocks for the fifteen members of the European Union, plus Norway, rose 7.032 million barrels to 1.08 billion in March - more than doubling the year on year surplus to 19.32 million barrels.
More crude is also flowing into the market from Iraq, which boosted exports by 471,000 barrels per day to 2.29 million barrels per day in the week to 06 April. Iraq also reached the highest four week oil exports average since early November, with 2.24 million barrels per day through 06 April.
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