WikiLeaks reports doubts among U.S. officials about Saudi reserves
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures rose Wednesday ahead of the government’s weekly supplies data, while a fresh WikiLeaks report revealed doubts among U.S. officials about Saudi Arabia’s oil reserves dating back to 2007-2009.
Crude oil for March delivery rose 29 cents, or 0.3%, to $87.23 a barrel on the New York Mercantile Exchange.
The U.S. Energy Information Administration will report its take on the nation’s inventories of crude and crude products at 10:30 a.m. Eastern.
Analysts polled by Platts expect crude-oil stocks to rise by 2.4 million barrels and gasoline supplies to increase by 3.1 million barrels.
The American Petroleum Institute said late Tuesday that crude-oil supplies fell 558,000 barrels in the week ended Feb. 5. The Washington-based trade group also reported a rise of 3.2 million barrels for gasoline stocks and a decline of 538,000 for distillates supplies.
Separately, U.S. diplomatic cables from 2007 to 2009 made public by the website WikiLeaks said Saudi Arabia is unable to pump enough oil to keep prices from rising, according to a report in the U.K.’s Guardian newspaper.
Based on views from a senior Saudi government oil executive, the cables say Saudi Arabia’s reserves may be overstated by nearly 40%, according to the report.
The report cites comments attributed to Sadad al-Husseini, Saudi oil monopoly Aramco’s geologist and former exploration chief, that Aramco couldn’t reach the 12.5 million-barrel daily capacity needed to keep prices from rising.
The report quoted the cable as saying: “According to al-Husseini ... it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray.”
On Tuesday, crude for March delivery added 39 cents, or 0.4%, to close at $87.84 a barrel on the New York Mercantile Exchange.
Meanwhile, gasoline futures continued to gain Wednesday, with the March contract (RBH11 2.50, +0.05, +1.96%) adding 15 cents, or 0.6%, to $2.51 a gallon.
Grains shoot up after USDA report
Corn and other grains futures rallied after the U.S. Department of Agriculture released this month’s World Agricultural Supply and Demand Estimates.
The USDA slashed its forecast for domestic and international ending stocks of corn, further tightening the market.
Corn for March delivery (CH11 692.50, +18.75, +2.78%) added 30 cents, or 4.5%, to $7.04 a bushel on the Chicago Board of Trade. That increase is the limit set by the exchange.
Other grains followed suit, with March wheat (WH11 883.25, +9.00, +1.03%) rising 6.9% to $9.34 a bushel, and March soybeans (SH11 1,443, +9.00, +0.63%) up 4.9% to $15.04 a bushel.
Much of the decrease in domestic ending stocks of corn was due to an rising ethanol demand for corn, said Darin Newsom, an analyst with Telvent DTN in Omaha.
The report noted few changes for wheat and soybeans, but the grains were following corn higher, Newsom added.
