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Crude Up and Down |
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The workers reportedly intend to strike for three days beginning April 11 in protest of working
conditions. Nigeria is a key exporter of crude and a member of the Organization of Petroleum
Exporting Countries.
"Considering the announcement, we suspect this is a political move and doubt any supply will
ever be affected," said Kyle Cooper, an energy analyst with Citigroup. "A series of strikes by oil
workers last year didn't affect Nigeria's oil production because the unions ensured that essential
services kept running.
GO FIGURE
"However, it seems that is the driving force, as OPEC
appears ready to increase supply again."
See the best fuel-economy2 values
for 2005 model year vehicles.
Ali al-Naimi, Saudi Arabia's oil minister, reportedly said
his country wants to alleviate concern about global
supplies and has 1.5 million barrels of spare capacity that
can be brought up to production to stem rising prices.
"There is a possibility, though, that hard-line OPEC members have convinced their brethren that
the world economy is doing fine even in the face of rising oil prices," said John Kilduff, vice
president of energy risk management at Fimat.
Against this backdrop, April crude was last down two cents at $56.70 a barrel after trading as high
as $57.12 a barrel on the New York Mercantile Exchange. The contract had reached all-time high
of $57.60 in intraday trading last Thursday, while the highest-ever closing price was Friday's
$56.42.
The May contract, which begins trading as the front-month contract on Tuesday, was last off 14
cents at $57.10. It had reached a high of $58.16 a barrel last week.
"The energy markets are likely to have a big week ahead of the Easter weekend and the supply
data on Wednesday could be the catalyst to pushing prices toward $60 or back down below $55," said Kevin Kerr, president of Kerr Trading International.
For his part, Mr. Kerr predicted short covering early in the week would propel prices to an all-
time high. He also expects to see increases in crude and heating oil supplies and a contraction in
gasoline inventories when the Energy Department and the American Petroleum Institute issue
their respective weekly supply data updates on Wednesday.
"The 'hysterical blindness,' which the vast majority of traders are falling into, simply has caused
this market to run too high, too fast and a correction may be due," Mr. Kerr said.
Mr. Cooper is looking for a buildup in weekly U.S. crude stocks, along with a slight decline in
gasoline supplies and a decrease in distillate supplies, though at a rate less than what had been
reported last week.
April gasoline ticked up 1.25 cents at $1.588 a gallon, after rising 3.8% last week to close at a
record high of $1.5755. The average price of gasoline in the U.S. rose to a record level in the past
two weeks and is expected to climb even higher, according to a survey released Sunday.
According to the AAA Daily Fuel Gauge Report, the average price for a gallon of regular
unleaded gasoline in the U.S. is $2.072.
April heating oil advanced 0.12 cent to $1.573 a gallon.
Meanwhile, natural gas slipped 3.3 cents to $7.24 million British thermal units after surging 7.4%
in the latest week.
"With the end of winter in sight and abundant inventories, most think it's a sale but nobody is
willing to test buyers' resolve," Mr. Kilduff said. "Clearly, a major issue is going to be the
prevailing level of crude ... which actually poses a much larger bearish risk from current levels."
Mr. Cooper said he expects the Energy Department to report a natural-gas storage decline similar
to the 95 billion cubic feet reported last week. Last year, the drawdown in gas inventories was 65
billion cubic feet.
Oil and gas stocks fell in morning trading, and the Amex Oil Index last stood at 864.26 points,
down 1.2%. |
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© 2002-2008 Opportunities In Options - All Rights Reserved |
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Although this information is believed to be correct and from reliable sources, no guarantees are being made to its accuracy. Past performance is not indicative of future results. All trading involves a risk of loss.
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