Oil Trades Little Changed After Falling on Iran-U.K. Talks
Crude oil was little changed in New York after falling the most in more than three weeks yesterday on signs the dispute over Iran's capture of 15 British navy personnel may be resolved without disrupting oil supplies.
Both sides want an ``early resolution of this issue through direct talks,'' U.K. Prime Minister Tony Blair said in a statement late yesterday. A U.S. Energy Department report today will probably show gasoline inventories rose because of imports and increased refining rates.
``Since the recent spike followed the escalation of tensions, the de-escalation of tensions simply has to push the price lower,'' said Dariusz Kowalczyk, chief investment strategist at CFC Seymour Ltd. in Hong Kong. ``Products will be more important in today's release than crude so higher levels of products are likely to exert downward pressure on price.''
Crude oil for May delivery was at $64.66 a barrel, up 2 cents, in after-hours electronic trading on the New York Mercantile Exchange at 10:50 a.m. in Singapore.
The contract fell $1.30, or 2 percent, to $64.64 yesterday, the biggest one-day decline since March 9. Futures touched $68.09 a barrel on March 27, the highest since Sept. 6, and closed near $66 a barrel each of the previous three sessions.
``We seem to be getting somewhere with this Iranian situation,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``If we see a build in unleaded gasoline in the inventory report that is really going to do some damage to this market.''
In London, Brent crude oil for May settlement was at $67.87 a barrel, up 6 cents, in electronic trading on the ICE Futures exchange at 10:52 a.m. Singapore time.
Iranian Stance
Iran, the world's fourth-largest oil producer, seized the marines and sailors in the Persian Gulf on March 23. It says the group entered its territorial waters while searching merchant ships. Britain says the boarding party was in Iraqi waters at all times.
Iranian Vice President Parviz Davudi said the standoff may be resolved ``soon'' if the U.K. acknowledges the naval crew entered Iran's waters illegally, Agence France-Presse reported.
The U.K. was today awaiting a response from Iran over a proposal for ``direct bilateral discussions.''
About a quarter of the world's oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf.
Gasoline Inventories
Gasoline for May delivery was at $2.0170 a gallon, down 0.07 cents, in after-hours trading after falling 1.2 percent to $2.0177 yesterday, its third straight decline.
A U.S. Energy Department report today will probably show gasoline supplies in the world's largest oil user fell by 150,000 barrels last week, according to a Bloomberg News survey of 14 analysts, the smallest decline in eight weeks.
U.S. gasoline use peaks during the summer vacations starting with the Memorial Day holiday late May. The North Atlantic hurricane season, which often disrupts oil output and refining along the Gulf of Mexico coast, runs from June 1 through Nov. 30.
Five major hurricanes may form this year, though the season will be less active than in 2004 and 2005, forecasters from Colorado State University said yesterday. There is a 74 percent chance of major storm striking land, with the odds about even for landfall on the eastern seaboard or the Gulf of Mexico.
Hurricanes Katrina and Rita smashed rigs and pipelines, flooded refineries and did more than $81 billion of damage on the Gulf coast in 2005.
Technical Indicators
Crude oil stockpiles probably rose 500,000 barrels, from 328.4 million a week earlier, based on the median estimate from the analyst survey. Refinery utilization probably rose a third week to 87.6 percent, an 11-week high. The Energy Department will publish its report at 10:30 a.m. in Washington.
Oil prices have a limited downside according to technical indicators used by traders to predict price movements, said CFC's Kowalczyk.
Crude will find support at around $64 a barrel based on the 50 percent retracement level found using Fibonacci analysis. That is halfway between the record high of $78.40 a barrel on July 14 and January's low of $49.90.
The next level of support is around $63.48 a barrel or the same price as the 200-day moving average, said Kowalczyk. A moving average takes the average of the previous days closing prices.
``There will be some difficultly moving lower because of these technical levels,'' said Kowalczyk.
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Both sides want an ``early resolution of this issue through direct talks,'' U.K. Prime Minister Tony Blair said in a statement late yesterday. A U.S. Energy Department report today will probably show gasoline inventories rose because of imports and increased refining rates.
``Since the recent spike followed the escalation of tensions, the de-escalation of tensions simply has to push the price lower,'' said Dariusz Kowalczyk, chief investment strategist at CFC Seymour Ltd. in Hong Kong. ``Products will be more important in today's release than crude so higher levels of products are likely to exert downward pressure on price.''
Crude oil for May delivery was at $64.66 a barrel, up 2 cents, in after-hours electronic trading on the New York Mercantile Exchange at 10:50 a.m. in Singapore.
The contract fell $1.30, or 2 percent, to $64.64 yesterday, the biggest one-day decline since March 9. Futures touched $68.09 a barrel on March 27, the highest since Sept. 6, and closed near $66 a barrel each of the previous three sessions.
``We seem to be getting somewhere with this Iranian situation,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``If we see a build in unleaded gasoline in the inventory report that is really going to do some damage to this market.''
In London, Brent crude oil for May settlement was at $67.87 a barrel, up 6 cents, in electronic trading on the ICE Futures exchange at 10:52 a.m. Singapore time.
Iranian Stance
Iran, the world's fourth-largest oil producer, seized the marines and sailors in the Persian Gulf on March 23. It says the group entered its territorial waters while searching merchant ships. Britain says the boarding party was in Iraqi waters at all times.
Iranian Vice President Parviz Davudi said the standoff may be resolved ``soon'' if the U.K. acknowledges the naval crew entered Iran's waters illegally, Agence France-Presse reported.
The U.K. was today awaiting a response from Iran over a proposal for ``direct bilateral discussions.''
About a quarter of the world's oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf.
Gasoline Inventories
Gasoline for May delivery was at $2.0170 a gallon, down 0.07 cents, in after-hours trading after falling 1.2 percent to $2.0177 yesterday, its third straight decline.
A U.S. Energy Department report today will probably show gasoline supplies in the world's largest oil user fell by 150,000 barrels last week, according to a Bloomberg News survey of 14 analysts, the smallest decline in eight weeks.
U.S. gasoline use peaks during the summer vacations starting with the Memorial Day holiday late May. The North Atlantic hurricane season, which often disrupts oil output and refining along the Gulf of Mexico coast, runs from June 1 through Nov. 30.
Five major hurricanes may form this year, though the season will be less active than in 2004 and 2005, forecasters from Colorado State University said yesterday. There is a 74 percent chance of major storm striking land, with the odds about even for landfall on the eastern seaboard or the Gulf of Mexico.
Hurricanes Katrina and Rita smashed rigs and pipelines, flooded refineries and did more than $81 billion of damage on the Gulf coast in 2005.
Technical Indicators
Crude oil stockpiles probably rose 500,000 barrels, from 328.4 million a week earlier, based on the median estimate from the analyst survey. Refinery utilization probably rose a third week to 87.6 percent, an 11-week high. The Energy Department will publish its report at 10:30 a.m. in Washington.
Oil prices have a limited downside according to technical indicators used by traders to predict price movements, said CFC's Kowalczyk.
Crude will find support at around $64 a barrel based on the 50 percent retracement level found using Fibonacci analysis. That is halfway between the record high of $78.40 a barrel on July 14 and January's low of $49.90.
The next level of support is around $63.48 a barrel or the same price as the 200-day moving average, said Kowalczyk. A moving average takes the average of the previous days closing prices.
``There will be some difficultly moving lower because of these technical levels,'' said Kowalczyk.
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