AP: Oil Steady As US Dollar Weakens Against Euro And Pound
Oil prices firmed today after snapping a five day losing streak yesterday following comments from Qatar’s oil minister, who said that OPEC (Organisation of Petroleum Exporting Countries) would likely decide against raising output in 2010 due to the currently sufficient supply in the market.
March Brent Crude stood at US$76.67/barrel, while US light, sweet crude held on to US$78.29/barrel.
However, crude was still under pressure from a milder weather following an unexpectedly cold period in late December and early January, which boosted the demand for heating oil, as well as last week’s inventories update from the US Department of Energy, which reported an increase of 3.7 million barrels in crude oil stockpiles in the week to 8 January.
After peaking at nearly US$84/barrel, US benchmark crude shed US$5 last week to move down to below US$79/barrel, in part due to a stronger US Dollar. Movements in the currency market were behind today’s changes in crude prices as the American currency softened against the euro and the pound to bolster demand for oil and help it to a marginal increase. The US Dollar is still subdues by the mixed economic updates that came out in the US recently, denting the sentiment and raising doubts about how fast the economic recovery is going to unravel in the world’s largest consumer of energy.
The latest updates included a reading of the University of Michigan consumer sentiment index, which showed a marginal increase from 72.5 to 72.8, while financial services firm JPMorgan Chase (NYSE: JPM) released a disappointing quarterly update not long after America’s largest aluminium producer Alcoa (NYSE: AA) failed to meet market expectations with its own quarterly results.
IBM (NYSE: IBM) and Citigroup (NYSE: C) wil update the market on their quarterly performance today.
Most oil and gas stocks were in the red today. Tullow Oil (LSE: TLW) was at the bottom of the pile with a 2% loss, while Cairn Energy (LSE: CNE) followed with a 1.2% decline and BG Group (LSE: BG) was down 1%. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) both lost slightly less than 1%.
Services companies Amec (LSE: AMEC) and Petrofac (LSE: PFC) both slid 1%.
Midcaps also were in decline. Heritage Oil (LSE: HOIL) led the retreat with a 3% slide, while Dana Petroleum (LSE: DNX) pulled back 1.5% and Dragon Oil (LSE: DGO) and Premier Oil (LSE: PMO) lost 1.3%.
JKX Oil & Gas (LSE: JKX), Salamander Energy (LSE: SMDR) and Soco International (LSE: SIA) all shed 1%.
Wellstream Holdings (LSE: WSM) was down 1%, while another FTSE 250 services company Wood Group (LSE: WG) was flat.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) moved with the sector, sliding 5%.
North Sea explorers Xcite Energy (AIM: XEL) went against the tide, tacking on 3.5%. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) also did well, adding 2.5%.
