NYMEX crude to rise as Iraq
boils and OPEC leaks
(In April 12 New York story headlined "NYMEX crude to rise as Iraq boils
and OPEC leaks," please read in paragraph eight "...IPE May Brent
crude settled 89 cents higher at $33.37 on Thursday." instead of "IPE
May Brent crude settled 89 cents lower..." (Corrects that crude settled
higher.) A corrected repetition
NEW YORK, April 12 (Reuters) - NYMEX crude oil futures were called higher on Monday as the violence in Iraq kept security concerns propping up prices along with strong global demand, signified by China's booming second quarter imports. Higher prices in electronic ACCESS trading came despite a report from an industry source that OPEC export kingpin Saudi Arabia is increasing exports in May because of crude backed out of refineries undergoing maintenance. "I think higher prices in ACCESS represented an increase in the security premium," said Mike Fitzpatrick, analyst at Fimat USA. Crude imports by the world's second largest oil consumer China soared 35.7 percent year on year in the first quarter 2004, the official Xinhua news agency said on Monday.
NYMEX May crude was called 20 cents to 25 cents higher after ending ACCESS 24 cents higher at $37.38 a barrel, trading from $37.11 to $37.44. On Monday nearby resistance should be evident at $37.50, and above that, in the area of $37.75/$37.87. Support was slated at $36.15. Last week's rally sparked by a sharp fall in U.S. commercial crude inventories on Wednesday came after the market earlier bounced off the April 2 session low of $33.30, the lowest price for prompt crude since Feb. 10's $32.82. London's oil market stayed closed for Easter holiday on Monday, after IPE May Brent crude settled 89 cents higher at $33.37 on Thursday.
U.S., Japanese and Chinese civilians in Iraq have been kidnapped by insurgents in recent days, even as the U.S.-led coalition attempts to quell resistance that flared up Falluja and other cities. The sudden lack of control by the U.S.-led occupation renews uncertainty about Iraq's ability to bring oil exports back to pre-war levels. A Friday report from the Paris-based International Energy agency (IEA) said that Chinese oil demand growth continued to surpass expectations. The IEA revised up its estimate of incremental Chinese oil demand in the first quarter by 180,000 barrels per day (bpd) to a record 6.14 million bpd, an 18 percent increase from the same period last year.
The soaring Asian demand, a recovering U.S. economy and steady European market have thus far offset Friday's forecasts from the IEA that the OPEC 10 members bound by quotas showed no signs of tightening compliance in March and appear to remain well in excess of the new quotas in April. OPEC ministers met March 31 and agreed to keep at least the cosmetic lowering of its production quota by a million bpd from April 1. With OPEC's reference crude oil basket price up at $32.37 as of Thursday, the same day NYMEX crude tacked on nearly a dollar, it is not difficult to see why cartel members are tempted to produce over quota.
Three Japanese refiners were told by Saudi Arabia that it will supply full term crude volumes in May, a surprise hike in supplies, traders said on Monday. As the summer driving season in the U.S. approaches, refinery glitches, both minor maintenance and more serious incidents help keep gasoline futures strong, not a surprise with U.S. retail prices hovering at record levels. NYMEX May gasoline was called 0.75 cent to 1.00 cent higher after ending ACCESS up 0.82 cents at $1.1590 a gallon. Resistance was expected at $1.1610 to $1.1630. Support was slated at $1.1125. NYMEX May heating oil was called 0.25 cent to 0.50 cent higher after ending ACCESS up 0.56 cent at 93.10 cents a gallon.
Resistance was charted at 93.60/93.85 cents. Support was slated at 90.25 cents.