The Really Useful Gold Thread

Possible HIGH in XLE


Crude prices stay above US$61 a barrel ahead of U.S. petroleum data snapshot

SINGAPORE, Dec 13, 2005 (AP WorldStream via COMTEX) -- Crude oil prices stayed above US$61 a barrel Wednesday ahead of the market-moving U.S. petroleum inventories report, as new forecasts raised global demand levels for the new year and warned of a looming price spike.



On the New York Mercantile Exchange, light, sweet crude for January rose 10 cents to US$61.47 a barrel midmorning in Singapore - nearly 50 percent higher than a year ago. The contract had risen 7 cents to US$61.37 a barrel overnight in New York.

"The market is now waiting for the U.S. government's oil stocks data," said Tokyo-based Himawari CX trader Ken Hasegawa. "If there're any surprising declines in U.S petroleum stocks, crude futures will likely to try breach the US$62 mark again."

The U.S. Department of Energy will release its weekly petroleum stocks report later Wednesday, and a dip in crude or its related stocks usually means an increase in demand. The report is a bellwether as the United States is the world's largest energy user.

On Wednesday, forecasters Accuweather Inc. said a pair of storms straddling the East Coast will cause the "second major winter weather scenario in less than a week."

One will bring at least 25.40 centimeters (10 inches) of snow in Michigan while another will move up the coast, Accuweather said.

"The most temperature-sensitive products are the gas and the heating oil and that's what's moving the market," said Chris Mennis from brokerage firm New Wave Energy in California.

. . .
Natural gas, which reached an all-time intraday price of US$15.78 per 1,000 cubic feet Tuesday, was up 6 cents to US$15.47.

Elsewhere, the Paris-based International Energy Agency forecast that world oil demand in 2006 would increase by 1.79 million barrels a day - a 2.2 percent increase on year.

The bulk of the increase is expected in the second half of the year, with the U.S. showing the sharpest increases, the IEA said.

According to the IEA's new medium-term projections, global oil demand is expected to grow 1.8 million to 2 million barrels daily a year through 2010 as China and India continue to expand.

With the world's appetite for crude on the increase, the global buffer of spare oil has rapidly reduced and is partly blamed for the crude price spikes that began last year.

Which has at least one forecast predicting a "super-spike" in prices.

"Resilient energy demand, lackluster supply growth, and nonexistent spare capacity continue to underpin our view that we are in the early stages of a multiyear 'super spike' phase," said Goldman Sachs in its latest energy review.

This year could be the first year of that phase, Goldman Sachs said, which could last five years.

In other market-related news, Venezuelan Oil Minister Rafael Ramirez said major oil-exporting countries should consider trimming output at their next meeting to avoid oversupplying the market.