MW: Oil prices drop ahead of data on petroleum inventories
Traders shrug off demand forecast revision by International Energy Agency
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil prices declined on Thursday, tracking losses in stock-index futures, as the market awaited government data that's expected to show a buildup in U.S. crude inventories.
The International Energy Agency revised higher its view of global oil demand for 2009 and 2010, but that failed to boost crude prices.
Crude oil for December delivery fell 60 cents, or 0.8%, to $78.68 a barrel in electronic trading on Globex.
U.S. stock futures weakened Thursday after failing to move past a key technical barrier in the last session.
"Despite the weak U.S. dollar, the oil price is struggling to break through the threshold of $80 a barrel," wrote analysts at Commerzbank in a note to clients. "We view this as a sign of relative weakness and expect lower prices over the next weeks."
The dollar index (DXY 75.23, +0.07, +0.09%) , which tracks the performance of the greenback against a basket of other major currencies, was little changed at 75.232 in recent trading.
Oil futures finished marginally higher on Wednesday.
The Energy Information Administration will report its closely watched inventory data at 11 a.m. Eastern on Thursday -- a day later than usual because of the Veterans Day holiday.
Analysts polled by Platts expect a buildup of 1 million barrels in commercial crude stocks. They also project an increase of 700,000 barrels for gasoline and a decline of 900,000 barrels for distillates on the week.
Refinery utilization is projected to have edged up 0.4 of a percentage point, to 81%, in the latest week.
IEA revises demand outlook
The Paris-based IEA revised higher its global oil demand outlook for 2009 and 2010, citing "surging" Chinese and Saudi Arabia demand and somewhat higher-than-anticipated U.S. data.
The Chinese growth reflects stimulus-induced infrastructure spending and the Saudi demand is for power generation rather than industrial production. For the first time since the second quarter of 2008, the IEA sees quarterly demand rising in the fourth quarter.
It upped its 2009 view by 210,000 barrels a day to 84.8 million barrels a day, and upped its 2010 view by 140,000 barrels to 86.2 million barrels a day.
