Here is the main news for today, November 25th along with a summary of the EIA report vis-à-vis the changes that occur in US oil and gas inventories for last week.
- Crude oil prices are currently still on the rise, after yesterday’s high increase of between 3 and 4 percent. Part of this surge is attributed to the news on the US’s economy slow recovery from its slump. This claim is supported by figures which were published yesterday on the job market showing a decline in jobless claims. Furthermore, consumer spending and income are on the rise. If the US economy is on its way to recovery, it will increase its consumption in energy and could drive energy prices up, however it’s still soon to make such a prediction..
- Yesterday, November 24th the EIA published its weekly report on energy commodities, and one of their main insights was in regards to the relationship between the changes in spot crude oil prices and the retail market prices such as gasoline. According to their estimates, on average, there is a lag of 2.5 months between the changes in spot prices and retail prices. Furthermore, only 50% of the changes are reflected in the retail prices within two weeks (from the time that spot prices changed) and 80% of the changes within 4 weeks. Since there is a tax on retail gas, a change in the spot price will not entirely be reflected in the retail price, as the tax diminishes the change impact.
- After two weeks of consecutive decline in crude oil stocks, last week there was a small rise of 0.1% which is an over one million barrels of crude oil.
- Furthermore, there was a rise in Finished Motor Gasoline stocks after a three weeks fall, and after reaching last week the lowest levels in the past 20 years. Currently, there was a one percent increase or nearly 0.7 million barrels were added to these stocks. This is as a result of many refineries in Northeast of America and Canada shutting down due for maintenance repairs until the beginning of November. Since this issue was resolved we can see the fruits of these refineries’ labor with this increase in Finished Motor Gasoline stocks at the end of last week.
- The repot also shows that, Propane inventories are declining as the winter progress in the US. Last week inventories registered a decline of 0.8% compare to the previous week, which is a drop of over half a million barrels.
Here is an update on the prices of main energy commodities for November 25th:
The crude oil price of short term futures (Nymex) – delivery for January 2011, as of 16.24PM GMT, on the New York Mercantile Exchange, is currently traded at 84.50 USD per barrel, which represents a 0.64 increase or a 0.76 % rise.
The Dated Brent spot crude oil reached 85.87 USD per barrel – a 0.1 per barrel rise as of 16.35PM GMT.
The Natural Gas prices (the Nymex Henry Hub Future) slow down its yesterday’s decline, and is currently traded at 4.39 $ MMBTU (one million BTU) as of 16.25PM GMT, a 0.05% decrease.