comex gold intraday

Weak demand forecasts affect Oil prices
11 June 2008 11:51:36



Oil prices continued the recoil from record high levels reached last week. Forecasts for lower global oil consumption amid the skyrocketing prices also affected the movement.



The International Energy Agency lowered its forecast for average global oil product demand in 2008 to 86.8 million barrels a day, down 80,000 barrels a day from its previous estimate.



According to the latest energy-outlook report from the US Energy Information Administration, global oil consumption was up a lower than expected 630,000 barrels per day during the first quarter of 2008 compared with year-ago levels, against the expected growth by 1 million barrels a day.



Crude oil July in NYMEX settled at $131.70 ($134.35), after trading in the range $137.98 - $130.80.



The price of benchmark contract of crude oil in the New York Mercantile Exchange had soared over $10 to a new all-time high of $139.12 a barrel on Friday, recording the biggest one-day gain in dollar terms, as geo-political tensions were ignited by Israel’s threats to strike on Iran over its nuclear programme.



Israel's Transport Minister Shaul Mofaz on Friday commented that an Israeli attack on Iranian nuclear sites could not be ruled out if Iran continues with its program for developing nuclear weapons.



Another drop in inventories also fuelled the rally. US Crude supplies had dropped by 4.8 million barrels to 306.8 million for the week ended May 30, according to the latest update by US Energy Department, taking the total fall in supplies in three weeks to around 19 million barrels.



Potential supply threats due to geo-political tensions and the Atlantic hurricane season and OPEC’s unwillingness to increase output despite high prices continue to underpin oil prices.



The Atlantic hurricane season officially began on June 1st. Arthur, the first Atlantic storm of the season, made landfall on Sunday near Mexico forcing the closure of two export terminals, but afterwards weakened to a tropical depression creating heavy rains in the Gulf of Mexico.



Repeated attacks on Nigerian oil facilities sustain concerns on supply from the oil–rich Niger Delta.



Meanwhile, Iran has cut its crude oil exports by 200,000 barrels a day since February 20 due to a seasonal fall in demand for crude oil during the refinery maintenance period. Iran is the world's fourth biggest oil exporter, currently producing around 4 million barrels a day, of which roughly 2.5 million barrels a day is exported.



On the supply side, ministers from the OPEC have indicated any output increase from the cartel remains unlikely, as it continues to blame record prices on speculation, geopolitical factors and the dollar's decline, rather than a lack of crude in the market.



DWTI (July) traded in the range $138.00 - $131.31 and closed at $131.86 ($134.75).

Weekly Outlook (NYMEX Crude oil July)

Expected to get supports at $133, $128 and $121.40; resistances are $137.65, $142.40 and $149.70.



TECHNICAL OUTLOOK (Intra-day)


DGCXCrude (July) - Bullish above 133.55; bearish below 133.00


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