Commodities » Energy

Oil and natural gas daily review (March 02, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Crude Oil fell more than 1 percent to below $79 a barrel on Monday as investors sold off an early rally and the dollar strengthened against the euro.

IN FOCUS

- Smith International Inc, an oilfield services company set to be taken over by industry leader Schlumberger Ltd, said on Monday it was actively pursuing the termination of all its activities in Iran and Sudan.

- U.S. crude oil and gasoline stocks rose last week while distillate supplies fell, a preliminary poll of analysts ahead of weekly industry and government inventory data showed on Monday.

- On average, crude stocks were forecast up 1.3 million barrels, with imports pushing up further and with refinery utilization expected to have been unchanged, according to the poll of seven analysts.

- Distillate, which includes heating oil and diesel, were projected down by an average of 600,000 barrels, the poll showed. Forecasters attributed the decline to continued higher heating oil demand in the wake of a third major snowstorm to hit the U.S. Northeast, the biggest regional consumer of heating oil.

- Gasoline stocks were forecast up an average of 400,000 barrels, according to poll, with demand seen down, particularly in the East Coast, as bad weather put the brakes on long road trips, analysts said.

- Vietnam's crude oil production in February fell 17.8 percent from the samemonth last year to an estimated 1.14 million tonnes, or about 290,400 barrels per day, the government said on Monday.

FUNDAMENTAL OUTLOOK

Crude oil is trading a hair higher on NYMEX after correcting amlost 2% in last trading session. We expect crude oil to trade firm for the day on the back of some weakness likely to be witnessed in the dollar during the day. And a positive surprise in US All car sales too is likely to trigger some upside in crude oil prices.