Home / Africa/International / Oil hovers around $80 per barrel

Oil hovers around $80 per barrel

Share this with more people!

Oil hovered around $80 on Wednesday after data showing a rise in U.S. crude imports was offset by steps taken by the Federal Reserve to shore up the economic recovery.

The higher U.S. crude imports coupled with lower refinery operating rates, in data released after the close on Tuesday, raised concerns of a stock build in the world’s largest energy consumer.

U.S. crude had pared losses late on Tuesday after Fed said it would use cash from maturing mortgage bonds it holds to buy more government debt, knocking the dollar and boosting equities.

“I think it’s positive on the U.S. economy,” said Tony Nunan, a risk manager with Mitsubishi Corp, adding that the government may have to continue spending to get the economic recovery back on track.

“Unemployment numbers in the last two months were not so good. There is a lot of feeling that the economic recovery in the U.S. has stalled.”

U.S. crude for September delivery fell 1 cent to $80.24 a barrel at 0244 GMT after falling $1.23 to settle at $80.25 a barrel overnight.

Front-month ICE Brent crude fell 2 cents to $79.58 a barrel.

U.S. CRUDE IMPORTS UP

Crude imports to the U.S. were up 1.6 million barrels per day to 10.96 million barrels per day, according to weekly data from the American Petroleum Institute (API) trade group released on Tuesday.

However, the data also showed U.S. crude inventories dropping by 2.2 million barrels in the week to August 6, versus analysts expectations for a 1.9 million barrel draw.

“We have to get through this grey zone. We need to have inventories drawn down more,” Nunan said.

U.S. refinery utilization fell 2.5 percentage points to 84.2 percent. Gasoline stocks fell 1.5 million barrels, compared with forecasts for a 200,000 barrel rise. <API/S>

Even though U.S. oil demand is expected to end a four-year-old decline this year by rising 140,000 barrels per day (bpd), or 0.7 percent, to 18.910 million bpd, analysts are skeptical.

“We are not sure that these estimates will hold through the next few months, though, given recent declines in the weekly figures and a series of disappointing numbers on the economy,” Peter Beutel, president of trading advisory Cameron Hanover said in a note.

“We expect demand in the U.S. to end the year very near unchanged against 2009.”

China’s refinery output eased in July from a record in June, although was still up 6.7 percent over a year earlier.

Economic growth in the world’s second-largest energy consumer is slowing slightly, although still remains robust as the government steers credit growth back to normal.

Source: Reuters

Share this with more people!

Check Also

Global displacements hit another record – UNHCR

The UNHCR, the UN Refugee Agency has disclosed that those displaced by war, violence, persecution, …