STOCK MARKET WATCH - Friday, 17 February 2012

[Demeter]

36. Oil Trades Near Six-Week High

http://www.bloomberg.com/news/2012-02-17/oil-trades-near-six-week-high-on-u-s-economy-optimism-over-greek-aid.html

Oil rose for a third day as signs of an improving U.S. economy and progress on a bailout for Greece bolstered the outlook for fuel demand. Futures increased as much as 0.6 percent and are poised for the biggest weekly gain this year after U.S. jobless claims dropped to the lowest level since 2008. European governments are considering lower interest rates on emergency loans to Greece and using European Central Bank contributions to plug a financing gap for the second bailout, two people familiar with the discussions said. “For the next few months, the demand side for the oil market should be getting better,” said Tetsu Emori, a Tokyo- based commodity fund manager at Astmax Ltd. who predicts oil will reach $145 a barrel in New York and Brent crude will climb to $155 in London by the end of the year. “Oil demand in Europe is not that strong due to uncertainty over Greece. After the resolution of the issues, the economic situation of developed countries will be in better shape,” said Emori, who helps manage $390 million at Astmax.

Crude for March delivery rose as much as 64 cents to $102.95 a barrel on the New York Mercantile Exchange and was at $102.84 at 4:01 p.m. Singapore time. Prices yesterday rose 51 cents, or 0.5 percent, to $102.31, the highest close since Jan. 4. They are up 4.2 percent this week, the most since the period ended Dec. 23, and have gained 19 percent from a year ago. Brent oil for April settlement rose 25 cents to $120.36 a barrel on the ICE Futures Europe exchange. The contract yesterday jumped $1.18, or 1 percent, to $120.11 a barrel, the highest close in eight months. The premium to West Texas Intermediate for the same month was at $17.38, compared with a record $27.88 on Oct. 14. Crude in New York has technical resistance along the upper Bollinger Band on the daily chart, according to data compiled by Bloomberg. This indicator is around $102.82 a barrel today. Sell orders tend to be clustered near chart-resistance levels. Oil may rise next week on concern that shipments will be disrupted by tension between Iran and the West over the country’s nuclear program, a Bloomberg News survey showed. Fifteen of 37 analysts, or 41 percent, forecast oil will climb through Feb. 24. Twelve respondents, or 32 percent, predicted prices will decline and 10 estimated there will be little change. “The main driver of the market is Brent, which potentially has more lift to the upside due to supply-side risks,” said Emori. Daily volumes in options granting the right to buy Brent for more than the current market price have risen above 25,000 on four days during the past two weeks in New York, signaling an increase in bets on a possible price rally.

Iran said Feb. 15 it was cutting crude shipments to France and the Netherlands, and had loaded locally built fuel plates into its nuclear research reactor in Tehran, according to reports by the state-run Mehr news agency and Press TV. The EU decided last month to halt purchases from Iran starting July 1 in an attempt to halt its nuclear program. Iran will increase the volume of oil it ships to China “soon,” state-run Mehr news agency reported yesterday, citing an unidentified official at National Iranian Oil Co...Oil prices are rising on demand from Asian countries, including China, the world’s second biggest crude consumer, according to HSBC Holdings Plc. “Most blame geopolitics for the latest spike, and we don’t quibble with that,” Frederic Neumann, co-head for Asian economic research at the bank in Hong Kong, said in a report today. “But fundamentally, Asia’s huge appetite for crude is providing the backdrop.” China’s crude imports increased 7.4 percent from a year ago to 23.41 million metric tons in January, a record high, according to preliminary data from Beijing-based General Administration of Customs on Feb. 10. Final figures are scheduled to be released on Feb. 21. “As prices continue to climb, a number of economies, such as India, Korea and Thailand, could feel the pinch,” Neumann said. “While waiting out this Greece thing, keep an eye on oil.”

Saudi Arabian Oil Co. plans to re-open the Damman oilfield, the company’s oldest, and produce there for the first time in 30 years in response to “tight market conditions,” the Economist Intelligence Unit reported yesterday. Officials at Aramco’s headquarters in Dhahran, Saudi Arabia, didn’t answer phone calls seeking comment.