Commodities » Energy

Oil and natural gas daily review (August 11, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

U.S. crude oil futures ended with pared losses on Tuesday after the Federal Reserve announced it will maintain its policy of low interest rates for an extended period, in a bid seen to support the faltering economic recovery

IN FOCUS

- China's crude oil output rose 6.4 percent from a year earlier to 17.22 million tonnes or 4.06 million barrels per day in July, data from the National Bureau of Statistics showed on Wednesday.

- A U.S. regulator on Tuesday rejected Enbridge Inc's plan to restart a pipeline that spilled oil into a Michigan river system, adding further uncertainty about how soon it will resume service.

- A tropical depression formed over the Gulf of Mexico on Tuesday on a track likely to take it near BP Plc's massive oil spill site before it makes landfall in Louisiana.

- A steam tank ruptured Tuesday morning at the Astoria oil/natural-gas fired power plant in Queens, New York, taking out of service the 175-megawatt Unit 2 for an unknown amount of time, said the plant's owner US Power Generating Co.

- The U.S. Energy Information Administration on Tuesday slightly owered its estimate for domestic natural gas production in 2010 but still expected total output this year to be up 1.9 percent from 2009 levels.

FUNDAMENTAL OUTLOOK

Crude oil prices are trading marginally down on NYMEX today. Rise in US crude imports and Federal Reserve's steps to support the economy is likely to weigh on crude prices. We also have crude inventory to be released by EIA later in the session today, any draw down in the stock may further limit the downside in crude oil.