imported post
Oil May Rise for a Fifth Week on Demand, Survey Shows (Update3)
Aug. 12 (Bloomberg) -- Crude oil may climb for a fifth straight week, its longest run of gains since March, as increased fuel demand saps stockpiles and pushes the price to a record, a Bloomberg survey showed.
Thirty-eight of 69 analysts and strategists surveyed, or 55 percent, said oil will gain next week. Twenty-four, or 35 percent, said prices will fall and seven forecast little change.
Global petroleum product use will rise 2 percent, or 1.6 million barrels a day, this year, the International Energy Agency said in a report yesterday. The agency also cut its 2005 non-OPEC supply forecast by about 200,000 barrels a day. Oil in New York rose above $66 a barrel for the first time today.
``Demand growth is likely to accelerate,'' said Dariusz Kowalczyk, a senior investment strategist at CFC Securities Ltd. in Hong Kong. ``GDP growth is picking up in the U.S., Eurozone and Japan.''
Crude oil for September delivery on the New York Mercantile Exchange added 8 cents, or 0.1 percent, to $65.88 a barrel at 11:14 a.m. in London, after earlier climbing to a record $66.13, the highest for the contract nearest expiry since trading began in 1983. The price has surged 45 percent in the past year.
Futures gained $3.49, or 5.6 percent, to $65.80 a barrel, the highest closing price on Nymex in the four days through yesterday.
Last week, 24 of 48 respondents said oil would fall. Nineteen of the past 32 surveys have correctly forecast the market's direction.
Demand Growth
The IEA said oil prices above $60 a barrel have done little to hurt economic growth or world oil demand so far. China's oil consumption is expected to rise 4.9 percent to 6.75 million barrels a day this year, and 7.5 percent in 2006, the report said. China is the biggest oil consumer after the U.S.
The U.S. economy may grow at a 4.1 percent annual pace this quarter, according to the median estimate of economists surveyed by Bloomberg. The economy expanded at a 3.4 percent rate from April through June and has been growing faster than other major economies.
Europe's economy may expand at the fastest pace in almost two years by the end of 2005 as a weakening euro buoys exports, the European Commission said yesterday. The economy of the dozen nations sharing the euro will probably expand about 0.6 percent in the fourth quarter and 0.4 percent in the third, the Brussels-based commission said.
OPEC Production
............................................................
OPEC, which produces more than a third of the world's oil, increased output by 285,000 barrels a day to an average 29.6 million last month, the IEA said. The group had less than 2 million barrels a day of spare production capacity in July, the bulk in Saudi Arabia, according to Bloomberg estimates.
OPEC raised its official output ceiling by 500,000 barrels to 28 million barrels a day on July 1.
The Arab oil embargo in 1973 prompted a surge in prices the following year. The Iranian revolution of 1979 and the country's war against Iraq in the 1980s sent the cost of a barrel for U.S. refiners to $35.24 in 1981, according to the Energy Department. That's about $75 in today's dollars.
``
It's misleading to draw a comparison between what is happening now and what happened in 1973 and 1974,'' said Simon Hayley, senior international economist at Capital Economics in London. ``Even if the price was the same in real terms, industrialized economies aren't as dependent on oil as they used to be. If we got into three-figure oil prices, that might start to have an impact'' on the world economy.
Gasoline Stockpiles
Oil futures surged after an Energy Department report on Aug. 10 showed that refinery shutdowns reduced gasoline stockpiles. Supplies of the motor fuel fell 2.1 million barrels, or 1 percent, to 203 million, the lowest since November. Consumption was up 1.4 percent in the four weeks ended Aug. 5 from a year earlier, according to the department.
Refiners operated at 95 percent of capacity, down 0.8 percentage point from the previous week, the report showed. Units at refineries run by Chevron Corp., BP Plc, Valero Energy Corp., Exxon Mobil Corp. and Sunoco Inc. have had unplanned shutdowns in recent weeks.
The decline in motor fuel supplies also pushed gasoline futures and pump prices to records.
`Supply Threats'
``The market remains preoccupied with supply threats and signs that U.S. demand has not yet dissipated as a result of high prices,'' said Marshall Steeves, an analyst with Refco Inc. in New York.
Crude-oil stockpiles rose 2.8 million barrels to 320.8 million last week, the Energy Department report showed. Imports jumped an average 101,000 barrels a day to 11.06 million, the second-highest ever. Some analysts said that rising crude-oil imports will lead to further inventory increases and reduce prices.
The U.S. consumes 25 percent of the world's crude oil and more than half of that is used to make gasoline.
``High imports could help boost petroleum inventories for a second consecutive week,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte. ``On the natural gas side of the equation, cooler weather this week may allow for a slightly greater inventory injection to show up next week. Both of these factors could be bearish for prices.''
High natural gas prices have helped support crude oil. Some factories and power plants can change from gas to oil-based fuels depending on cost. Natural gas rose to a 29-month high yesterday on concern that heat in the U.S. will cut the pace at which utilities store the fuel for winter.
Code:
Bloomberg's survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were:
RISE FALL NEUTRAL
3824 7
To contact the reporters on this story:Mark Shenk in New York at [email]mshenk1@bloomberg.net[/email]; Will Kennedy in Singapore at [email]wkennedy3@bloomberg.net[/email].
Last Updated: August 12, 2005 06:17 EDT
