Commodities » Energy

Oil and natural gas daily review (February 04. 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Crude oil futures ended lower on Wednesday, with volatility heating up near the close, as a larger-than-expected build in crude stocks overwhelmed support from a surprise drawdown in gasoline stocks.

IN FOCUS

- Autodata Corp in a statement Says US  auto sales January SAAR 10.78 million units Says January SAAR compares to 9.62 million units in January 2009 Says total U.S. auto sales up 6 percent in January 2010 from a year earlier

- OPEC oil ministers are unlikely to change output policy at their March meeting if the oil price remains around its current level of $75 a barrel, the group's secretary general

- Distillate fuel inventories fell in line with expectations. Commercial stockpiles of crude oil in the world's biggest consumer jumped by 2.3 million barrels to 329 million barrels in the week to Jan. 29, EIA reported, eclipsing analysts' forecasts for a modest 200,000-barrel increase.

- U.S. crude oil imports were up 559,000 barrels per day at 8.43 million bpd. Domestic gasoline stockpiles posted a surprise drawdown of 1.3 million barrels to 228.1 million barrels, instead of a projected 1.3 million barrel gain forecast by analysts. While gasoline demand was down marginally on the week, refinery output of the motor fuel was off 52,000 bpd at 8.58 million bpd.

- State-owned Chinese oil firm CNPC expects China's crude oil imports to increase 9.1 percent from a year earlier to 212 million tonnes in 2010, or 4.24 million barrels per day (bpd), a company report showed.

- Weekly throughput at Japanese refineries declined last week for the first time in five weeks, industry data showed on Wednesday as milder winter weather weakened heating fuel demand. Refinery production had been on the upturn after cold weather supported kerosene sales in the first half of January, but consumption has fallen since then as temperatures rose, providing a strong impetus for oil firms to trim runs.

FUNDAMENTAL OUTLOOK

Crude oil is trading tad lower on NYMEX following slight strenght in dollar overseas. However robust crude oil import numbers from China is likely to cap in major downside in crude oil prices. We have natural gas stock to be released by EIA in the evening session; natural gas is expected to take cues from it later in the evening.