Oil Falls a Second Day on Doubts Over Pace of Recovery in U.S.

June 18 (Bloomberg) -- Crude oil fell for a second day in New York amid doubts about the pace of the economic recovery in the U.S., the world’s largest energy consumer, after an increase in jobless claims and a manufacturing slowdown.

Oil extended yesterday’s 1.1 percent drop after the Labor Department said the number of Americans seeking jobless benefits last week climbed to a one-month high. U.S. fuel consumption fell 0.9 percent to the lowest level in five weeks in the seven days ended June 11, the Energy Department reported June 16.

“The U.S. economy is facing a major structural adjustment in the wake of the financial crisis and subsequent economic slump,” said Toby Hassall, a research analyst at CWA Global Markets Ltd. “The U.S. is still the largest consumer of petroleum, so a lack of recovery in fuel demand there will have an impact on the oil market.”

Crude oil for July delivery fell as much 48 cents, or 0.6 percent, to $76.31 a barrel on the New York Mercantile Exchange. It was at $76.38 at 7:37 a.m. Singapore time. The contract lost 88 cents to settle at $76.79 yesterday. Futures are down 3.6 percent this year.

Initial jobless applications increased by 12,000 to 472,000 in the week ended June 12. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. The number of people receiving unemployment insurance rose, while those getting extended benefits dropped.

Brent crude for August settlement rose 54 cents, or 0.7 percent, to $78.68 a barrel on the ICE Futures Europe exchange in London yesterday.

Crude Inventories

U.S. crude inventories were 8.4 percent above their five- year average last week, an increase from 7.3 percent the week before, the Energy Department said on June 16. Supplies gained 1.69 million barrels, or 0.5 percent, to 363.1 million last week, the department said. It was the first increase in three weeks as imports climbed and refinery operations declined.

Supplies at the Cushing, Oklahoma, delivery point for the New York futures, climbed 194,000 barrels to 37.6 million, near the record of 37.9 million. This gain has depressed West Texas oil relative to Brent, with the North Sea grade for August trading at a 64 cents premium to the corresponding U.S. contract.

An offshore drilling moratorium in the wake of the Gulf of Mexico oil spill could trim U.S. production by 200,000 barrels a day next year, eventually add $5 or more to the price of oil and cause the U.S. to seek more foreign crude, Adam Sieminski, chief energy economist for Deutsche Bank, said on Bloomberg television.

Oil Falls After U.S. Crude Supplies Climb, Housing Starts Drop

June 17 (Bloomberg) -- Oil fell from a six-week high after a government report showed U.S. crude supplies increased last week as refiners cut processing rates, and on concerns over the strength of the recovery as housing starts declined.

Oil reversed its 1 percent gain yesterday as new home construction fell 10 percent in May, the most since March 2009, and building permits dropped, the U.S. Commerce Department said yesterday. Crude supplies unexpectedly gained 1.69 million barrels, the Energy Department said. Analysts had forecast a 1 million barrel drop.

“Inventories are generally still pretty high, but the oil price has held up well relatively,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “Markets are still assuming a U.S. recovery, albeit an uneven recovery road.”

Crude oil for July delivery dropped as much as 46 cents, or 0.6 percent, to $77.21 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.26 at 7:22 a.m. Singapore time. The contract yesterday rose 73 cents, or 1 percent, to $77.67 a barrel, the highest settlement price since May 5. Futures are up 8.8 percent from a year ago.

Crude climbed yesterday as motor fuels gained on signs of higher consumption in the peak U.S. driving season from the Memorial Day weekend in late May to Labor Day in early September. Gasoline demand rose 1.6 percent to 9.34 million barrels a day, the highest level since the week ended Aug. 28.

Gasoline supplies fell 636,000 barrels to 218.3 million last week, the Energy Department said.

Crude oil stockpiles rose to 363.1 million in the week ended June 11, the department said. Inventories of distillate fuel, a category that includes diesel and heating oil, increased 1.8 million barrels to 156.6 million. A 1-million-barrel gain was forecast.

Brent crude oil for August settlement rose $1.04, or 1.4 percent, to end the session at $78.14 a barrel yesterday on the London-based ICE Futures Europe exchange.

FCPO Daily Commentary for 17th June 2010

FCPO 3rd month Sep futures contract rebound RM14 higher to close at RM2380 levels as compare to previous trading sessions with a total of 8,245 lots traded in the market. FCPO price trading higher after long consolidate near the low region before starts to surge up before end of trading sessions as soybean oil and crude oil were traded higher overnight sessions while mainly consolidate during electronic trading sessions.
FCPO price dip at RM2367 regions before run into consolidation phase but FCPO price trading higher before of trading sessions. Technically, FCPO seems complete wave 3 trading south to complete at 150% and 78.6% Fibonacci support levels before start to rebound after found support levels at RM2370 regions. FCPO price would expect further rebound in the coming trading sessions provided support levels at RM2370 and RM2360 were not violated in the coming trading sessions while expecting some degree of resistance levels at RM2406 and RM2420; 38.2% and 50% Fibonacci resistance levels.

FKLI Daily Commentary for 17th June 2010

FKLI June Futures contract traded 13 points higher to close at 1309 levels as compare to previous trading session to with a total of 7,122 lots traded in the market. FKLI opened and trading higher during trading sessions as Dow Jones were settle higher during overnight trading while regional indices further encourage FKLI intraday trading but FKLI retrace slightly lower before end of sessions due to mild profit taking activity.
FKLI penetrate previous resistance levels at 1308.5 regions during trading session and manage to surge up higher towards 1316 regions; 338.2% Fibonacci resistance levels, before retrace lower before end of trading sessions. Technically, FKLI seems extend further higher towards next nearest resistance levels at 1325 and 1348 regions; 78.6% and 100% Fibonacci resistance levels despite previous trading sessions dip low at 1269.5. However, FKLI must not trade below support levels at 1293 and 1269.5 in order for FKLI to remain in rebound phase. Failure to hold above the support levels shall indicate continuation of correction phase.

FCPO Daily Commentary for 15th June 2010

FCPO 3rd month Aug futures contract rebound RM24 higher to close at RM2410 levels as compare to previous trading sessions with a total of 6,330 lots traded in the market. FCPO price traded higher during trading sessions as soybean oil and crude oil electronic trading were traded higher despite were settled lower during overnight trading.
FCPO price consolidate within price range from RM2390 – RM2403 region before manage to break up and settled at higher traded price. Technically, FCPO seem to rebound after trading lower towards support levels at RM2370 and RM2357 region. FCPO price trading would view as bullish trading once traded price manage to trade above resistance levels at RM2430 and RM2460; both are 50% and 78.6% Fibonacci resistance levels.

FKLI Daily Commentary for 15th June 2010

FKLI June Futures contract traded 7.5 point higher to close at 1304.5 levels as compare to previous trading session to with a total of 3,263 lots traded in the market. FKLI price settled higher before of trading sessions after long stagnant trading due to overseas regional indices and Dow Jones futures electronic trading was traded higher during trading sessions.
FKLI consolidate within price from 1301 to 1303 region during trading sessions before price manage to break up from range to test 1305 regions. Technically, FKLI seems stands firm above 50% Fibonacci support levels at 1299.5 regions before break above previous resistance levels at 1303 and surge higher during trading sessions. FKLI would anticipate further upside trading provided support levels at 1296 and 1289.5 were not violated in the coming trading sessions. However, FKLI would expect to encounter great selling pressure around resistance levels at 1310 and 1325 region.

Oil Rebounds Above $74 in New York on U.S. Demand-Growth Bets

June 14 (Bloomberg) -- Crude oil rose in New York, extending last week’s gains, on speculation sustained growth in the U.S. economy will boost fuel demand from the world’s biggest energy consumer.

Oil climbed as much as 0.8 percent before reports this week that may show U.S. factories churned out more goods last month and the cost of living declined. This could point to a manufacturing-led recovery that isn’t generating inflation, according to a Bloomberg News survey of economists.

“It’s all about the economy,” said Chip Hodge, who oversees a $9 billion natural-resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “Economic sentiment is going to remain the ultimate driver of this market for the foreseeable future.”

Crude oil for July delivery rose as much as 59 cents to $74.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.30 at 6:38 a.m. Singapore time. Futures increased 3.2 percent last week and are up 5.1 percent from a year ago.

Production at U.S. factories, mines and utilities increased in May for the 10th time in 11 months, according to the median estimate of 63 economists polled by Bloomberg News ahead of Federal Reserve figures due June 16.

Consumer prices probably slipped 0.2 percent in May, after declining 0.1 percent the previous month, the survey showed.

Consumer Sentiment

The Thomson Reuters/University of Michigan preliminary consumer sentiment index for the U.S. rose to 75.5 for June from 73.6 last month, data June 11 showed. That’s the highest since January 2008, beating a median 74.5 estimate from economists polled by Bloomberg News.

“Any concerns about the economy are going to have a major impact on oil,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The strength of the market has been built on expectations of an economic rebound.”

Brent crude oil for July delivery rose as much as 30 cents, or 0.4 percent, to $74.65 a barrel on the London-based ICE Futures Europe exchange. It was at $74.63 at 6:15 a.m. Singapore time. The contract increased 3.1 percent last week.

The dollar dropped to $1.2138 per euro, from $1.2112 on June 11 in New York. The U.S. currency’s decline bolsters the investment appeal of commodities.

Soybeans Rise as China Increases Cooking-Oil Imports From U.S.

June 11 (Bloomberg) -- Soybeans rose the most in a week after a government report showed increased U.S. sales of vegetable oil to China, the world’s largest consumer.

For the second straight day, U.S. exporters reported selling 40,000 metric tons of soybean oil to China for delivery before the end of September, the U.S. Department of Agriculture said. China halted shipments from Argentina, the world’s biggest supplier, in April as part of a dispute over antidumping measures. China bought 51,621 tons of U.S. soybean oil in 2009.

“China is buying soybean oil from the U.S. to offset lost supplies from Argentina,” said Greg Hunt, a market analyst for Fox Investments in Chicago. “This is a big change in world trade.”

Soybean futures for November delivery jumped 14.5 cents, or 1.6 percent, to $9.0925 a bushel on the Chicago Board of Trade, the biggest gain since June 3. The November contract replaced July futures as the most-active contract on July 9, when the price touched $8.8675, the lowest level since Oct. 6. The November contract rose 1 percent this week, the most since the week ended April 23.

Almost all China’s soybean oil has come from Argentina and Brazil, customs data show. Imports of crude bean-oil from the U.S. have been mostly barred because of a procedural dispute on safety certification. The USDA said last week it may take steps to certify the safety of domestic soybean oil to spur exports to China.

Busy Port

Qingdao Port, the biggest in China’s Shandong province, is congested by ships arriving to unload soybeans, a person with direct knowledge of the matter said. As many as nine more ships, each carrying about 60,000 metric tons of soybeans, are scheduled to unload this month, in addition to the two or three that have already been processed, said the person who declined to be identified because the information isn’t public. Normally, there would be five, he said.

Prices also rallied on speculation that farmers may not plant as much as expected in parts of the Midwest after rains during the past three weeks delayed fieldwork, said Charlie Sernatinger, a vice president for Fortis Clearing Americas LLC in Chicago. The last dates for planting soybeans without losing a portion of government-subsidized crop-insurance coverage occur next week in some Midwest states, Sernatinger said.

Some fields from Nebraska to Ohio received as much as four times the normal rain in the past two weeks, according to data from the High Plains Regional Climate Center at the University of Nebraska in Lincoln. Farmers told the USDA in March they planned to boost planted acreage to a record 78.098 million acres this year.

“The rains just will not stop” in the eastern soybean- growing states, Sernatinger said. “Now analysts are starting to scale back on their earlier calls that the beans would add a half million acres to the March intentions number.”

The soybean crop in the U.S., the world’s largest grower, was valued at $31.8 billion last year, second only to corn at $48.6 billion, government figures show.