|
OilPrice.com Oil Market Summary for 01/18/2010 – 01/22/2010
By Darrell Delamaide for OilPrice.com
Monday - January 25, 2010
Category: Investment, Oil
New measures by Chinese authorities to curb bank lending reversed a rally in energy prices early in the week, bringing West Texas Intermediate futures down more than 4% in the second half of the week to below $75 a barrel by Friday.
China continued its efforts to slow down its economy and prevent overheating, and told some banks to stop making certain kinds of loans. The Chinese move on Wednesday hit all commodities across the board, from gold to lead, with the prospect of slower economic growth in the country.
Not even the news that China's oil imports in December exceeded 5 million barrels of oil a day for the first time could stop the decline.
U.S. data, meanwhile, showed that demand for oil had slipped 1.8% in the four weeks leading to Jan. 15 from the like period a year ago, when the U.S. economy was in the grip of a recession. Crude inventories declined in the week, against expectations, but gasoline inventories rose. Continued milder weather in the Northeast further dampened heating oil prices.
News that utilization of U.S. refinery capacity fell to its lowest levels since the 1980s drove home the point that demand for distillates was lagging. Refinery utilization in the previous week dropped 2.9 percentage points to 78.4% of the 17.6 million barrels per day total capacity, the lowest level in two decades except for periods when hurricanes shut down refinery operations.
The U.S. and China are the world's top two oil-consuming countries, so the signs of weakening demand in both were bearish for energy prices.
As if all that wasn't enough, the announcement by the White House on Thursday of tough new measures to limit banks' proprietary trading threw a double whammy in energy markets. There were concerns that Wall Street banks, among the biggest energy traders, would have to cut back their activities. Plus, the news sent equities into a tailspin, and dragged down commodities prices.
The uncertainty about U.S. bank restructuring reversed the dollar's climb against the euro, which had also weighed on crude oil prices. After dropping below $1.41, the euro bounced back up above that level at the end of the week.
But continuing concerns about Greece's debt and new uncertainty about whether Ben Bernanke will be confirmed for a second term as Federal Reserve chairman supported the dollar and were likely to dampen any strong rise for the euro, analysts said.
Originally published at: http://www.oilprice.com/article-crude-oil-prices-fall-victim-to-china-syndrome.html
By Darrell Delamaide for OilPrice.com who have recently launched a Free Market Intelligence Report which focuses on unique Geopolitical and Investment News which enables readers to spot trends and events in the marketplace and reduce investment risk. To find out more visit: http://www.oilprice.com
Published at the www.InvestorIdeas.com Investing, Research and Industry Articles News Feed - Investorideas.com Financial Article Feed
Become an Investorideas.com Member and access some of our best investor research tools: Investing in Renewable Energy, Environment and Water Stocks
Become an Investorideas.com Member - Gain login access to 8 global stock directories including renewable energy stocks directory, environment stocks, water stocks, fuel cell stocks, biotech stocks, defense stocks, natural gas stocks, oil and gas stocks as well as the Insiders Corner investor newsletter covering insider buying trends on small cap stocks.
Investors: Sign up for free newsletter, stock and sector news alerts at Investorideas.com - Or publish your own stock picks and share your investing and trading ideas with other investors. Publish your investor ideas today!
Investorideas.com goal for 2010: 'One Million Members Stronger', empowering one million investors to invest in innovation and technology for a better world. Join us today!
Disclaimer: The views and opinions expressed in the research published are those of the individual companies and writers and not necessarily those of Investorideas.com®, or any of the industry sector portals . At the time of publication, writers may hold positions in the stocks or companies mentioned.
Investorideas.com® or any of the industry sector portals cannot assure accuracy of the research presented. Investors are encouraged to research and verify facts and under no circumstances is Investorideas.com® endorsing the content as a recommendation to buy or sell stock.
|
