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North America's Gas,Oil & Liquids Daily News & Market Information Friday, June 4, 2010 No. 2557 ----------------------------------------------------------------------------- Crude oil futures for July delivery on the NYMEX ended $1.75, or 2.4%, higher yesterday to settle at $74.61 per barrel, rising after the weekly EIA report showed crude and gasoline inventories dropped more than expected as fuel consumption surged. July RBOB gasoline gained $0.0551 to settle at $2.0812 per gallon, and July heating oil futures rose $0.0332 to $2.0391 per gallon. Oil advanced after the Department of Energy said gasoline supplies fell 2.65 million barrels to 219 million last week, the lowest level this year. Stockpiles were forecast to drop by 500,000 barrels, according to analysts surveyed. Fuel demand increased 1.6% to 20 million bpd, the highest level since January 30, 2009. Crude oil futures are poised for a small gain for the week, the second consecutive weekly increase. Oil prices also rose yesterday after the US government said producers will have to resubmit plans to drill in Gulf of Mexico waters less than 500 feet deep. The Obama administration is pulling back exploration plans and requiring updated information to ensure that new safety standards and risk considerations are incorporated, Bob Abbey, acting director of the Minerals Management Service, said in a statement. US crude oil supplies fell 1.9 million barrels to 363.2 million last week. Inventories were forecast to be unchanged. Stockpiles of crude oil at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is delivered, rose 0.7% to 37.9 million barrels, the second-highest level since the Energy Department started keeping records at the storage hub in 2004. Consumption of all fuels climbed 8.1% to 19.7 million bpd from a year earlier in the four weeks ended May 28th, according to the Energy Department. In London, the Brent contract for July delivery on ICE settled $1.66 higher at $75.41 per barrel yesterday. NYMEX- Light Crude Oil Futures for July settled higher on Thursday as it extends the rebound off May's low. Thursday's high-range close sets the stage for a steady to firmer opening this morning. Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The crossover and close above the 18-day moving average indicates the intermediate-term trend has turned up. A positive setup occurred with the close over the 1st swing resistance. Multiple closes above the 20-day moving average crossing at $74.60 are needed to confirm that a short-term low has been posted. If July renews the decline off May's high, last July's low crossing at $66.11 is the next downside target. First resistance is the 20-day moving average crossing at $74.60. Second resistance is last Friday's high crossing at $75.72. First support is the 10-day moving average crossing at $71.97. Second support is May 25th's low crossing at $67.15. The US suspended shallow-water drilling in the Gulf of Mexico until oil and natural gas producers resubmit plans to meet revised safety and environmental rules. The Obama administration is pulling back the exploration applications and requiring updated information for waters less than 500 feet deep to ensure that new safety standards and risk considerations are incorporated, said Bob Abbey, acting director of the Minerals Management Service. Exploration in shallow waters can proceed once new permits are approved and won't be subject to the 6-month moratorium imposed by President Obama on deepwater operations after a BP well exploded in the Gulf of Mexico, administration officials said. 'Shallow-water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary Salazar outlined in his report to the president and have exploration plans that meet those requirements,' Interior Department spokeswoman Kendra Barkoff said. 'There is no moratorium on shallow-water drilling.' Obama and Interior Secretary Ken Salazar announced the deepwater moratorium on May 27th. The administration also delayed planned exploration in the Arctic Ocean near Alaska and canceled plans to search for oil and gas off the Virginia coast. Oil and gas exploration companies fell in New York trading after the Washington Post reported that the moratorium had in effect been extended to shallow-water drilling. Houston-based Rowan, a drilling contractor, fell as much as 12% on the New York Stock Exchange, and Ensco, a London-based driller, fell as much as 7%. The shares erased most of the declines by the end of regular trading. Regulators had approved Wedesday a permit letting Hercules Offshore drill a well in 65 feet of water near the mouth of the Mississippi River. It was rescinded yesterday, Jim Noe, the company's senior vice president and general counsel, said. 'The information we are receiving right now from MMS is a little confusing,' Noe said. 'At this point, we don't fully understand what additional information will be required. We expect |
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