Currently trading at 78.9, WTI crude oil for December delivery continues to trade narrowly ahead of US' inventory report. As the industry-sponsored API reported builds in crude and fuel stockpiles Tuesday, investors worried that official data will point to similar bearish results.
According to Bloomberg surveys, the US Energy Department probably show that crude oil inventory rose +1 mmb in the week ended November 6 while both gasoline and distillate recorded declines, by -0.35 mmb and -0.7 mmb, respectively.
Following the US Energy Department and OPEC, the International energy Agency also upgraded global oil demand outlook for 2010. The agency forecast consumption to drop -1.7% to 84.8M bpd in 2009 before rising to 86.2M bpd in 2010. These were slightly above October's projections of 84.6M bpd and 86.1M bpd for 2009 and 2010, respectively. IEA's upgrades were based on expected surge in demand in China and Saudi Arabia, as well as stronger-than-expected data in the US.
Despite worldwide bullishness in Chinese growth, Premier Wen Jiabo said that China's economic recovery is 'consolidating, but still faces many challenges and problems'. He also reiterated that the government will maintain a moderately loose monetary policy and a proactive fiscal stimulus.
Premier Wen's speech triggered profit-taking activities in risky assets. Stock market in Asia declined after rising for 5 days. The MSCI Asia Pacific Index lost -0.4%. Hong Kong's Hang Seng Index dropped -1% while Korea's KOSPI Index sank -1.4%.
In Europe, stocks climb higher after Eurozone's industrial production rose +0.3% mom in September while the reading in August was revised up to +1.2%.
Gold price retreats after soaring to 1123.4 earlier today. Profit-taking and recovery in USD are the main reason dragging price lower. Against the pound, the dollar continues to rise after the BOE Governor Mervyn King said that the central is open-minded to extend the QE further and depreciation in sterling is positive for economic recovery. Against the euro, the dollar rebounds as price failed to re-test previous low at 1.506 Tuesday.
US Oil Inventory
|Weekly change in inventory as of 06/11/09||Change||Market Expectation||Previous|
|Crude oil||+1.00 mmb||-3.94 mmb|
|Gasoline||-0.35 mmb||-0.29 mmb|
|Distillate||-0.70 mmb||-0.38 mmb|
Comparison between API and EIA reports:
|API (Nov 6)||EIA (Nov 6 )|
|Actual||Inventory||Previous||Forecast (using API's inventory level)||Inventory|
|Crude oil||+1.22 mmb||337.5mmb||-3.28 mmb||+2.09 mmb||338 mmb|
|Gasoline||+1.40 mmb||211.5 mmb||+0.50 mmb||+3.72 mmb||212 mmb|
|Distillate||+0.64 mmb||168.8 mmb||+1.79 mmb||+1.62 mmb||169 mmb|