Commodities » Energy

Oil and natural gas daily review (March 16, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Oil prices fell nearly 2 percent to below $80 a barrel on Monday, pressured by a stronger dollar and concerns that potential credit tightening in China might curb energy demand in the world's second-largest oil consumer.

IN FOCUS

- OPEC may not need to adjust output policy this year if the oil market remains stable and the global economy continues to recover, the oil minister of its top producer, Saudi Arabia, said on Monday.

- Current oil prices around $80 a barrel were "in a happy situation", Saudi Arabian Oil Minister Ali al-Naimi said on Monday. Speaking ahead of OPEC's Wednesday meeting, Naimi said oil ministers in the group were happy with the oil market situation and that the oil price was supported by fundamentals.

- U.S. crude oil inventories were forecast up for the seventh straight time last week, lifted by higher imports, a preliminary poll of industry analysts showed on Monday ahead of inventory reports due later this week

- The average forecast showed a 900,000 barrel increase in crude supplies, according to the poll of five analysts.

- Gasoline inventories were expected to have fallen by an average 300,000 barrels, with demand seen improving. Distillate stocks, which include heating oil and diesel, should show a seasonal decline, with the average forecast at 1.5 million barrels, according to the poll.

- U.S. retail gasoline prices soared to their highest level in nearly a year and half and could soon top $3 a gallon as rising crude oil costs push up pump prices, the Energy Department said on Monday.

FUNDAMENTAL OUTLOOK

Oil steadied below $80 a barrel on Tuesday after a fall of nearly 2 percent in the previous session, its biggest one-day fall in more than two weeks, as the market awaits the outcome of OPEC and central bank meetings. In the evening session we have API inevtory data to be released by the US any major draw or build is expected to drive the crude oil prices in either direction.