Oil prices pull back ahead of US inventories data
Oil prices pulled back this afternoon, dragged down by a buildup in US gasoline stockpiles, profit taking that followed yesterday's surge in oil futures and a stronger US dollar.
Traders are looking to today's inventories report from the US Department of Energy, to be released just before the close of play in London. Tuesday's data from the American Petroleum Institute (API) was mixed. API said that crude oil stockpiles in the US shed 860,000 barrels last week, while gasoline inventories added 2.4 million barrels.
The data pushed lower gasoline futures and gave a boost to the US dollar, putting more pressure on oil prices as it made the dollar-denominated crude more expensive for holders of other currencies.
Oil prices rallied yesterday after Goldman Sachs and Morgan Stanley both published bullish notes on commodities.
Goldman, which in April advised its clients to close long positions on commodities including copper and oil, said that the commodity markets had bottomed out and recommended adding copper, zinc and oil to portfolio.
The investment bank hiked its 2011 forecast for Brent crude at the end of 2011 from US$105 to US$120/barrel and from US$120 to US$140/barrel for the end of 2012.
Morgan Stanley has also raised its 2011 and 2012 forecasts for Brent crude.
The upbeat comments from the heavyweight advisers offset weak Chinese and US manufacturing data, pushing August contracts for US benchmark crude above US$100 per barrel.
US light, sweet crude for July delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), retreated to US$99.12/barrel, while August crude fell to US$99.58/barrel.
July Brent crude last traded at US$112.41/barrel on the ICE Exchange.
Supermajors BP (LON:BP) and Royal Dutch Shell (LON:RDSB) posted small losses, as did Tullow Oil (LON:TLW). Cairn Energy (LON:CNE) advanced 1.3 percent.
Soco International (LON:SIA) led the midcaps, climbing 4.2 percent. Heritage Oil (LON:HOIL) and Premier Oil (LON:PMO) added just over 1 percent.
EU operating Europa Oil & Gas (LON:EOG) was among the top performers in the sector, climbing 7.5 percent. US focused Nighthawk Energy (LON:HAWK) rose 5 percent.
Related news
- London Mining remains on track to hit 2012 production target at Marampa
- Ceres Power Holdings reports significant improvements of its fuel cell products
- Oxford Catalysts Group shares advance as it announces first start-up of FT reactor
- Mariana Resources kicks off drilling programme at Las Calandrias gold-silver project
- Orogen Gold begins Phase 1 drilling programme at Deli Jovan
- Magnolia Petroleum on track to hit 100 wells target by end-2012
- Mwana Africa sells 15pct stake in Freda Rebecca gold mine for $405k - UPDATE
