Oil hits 2015 highs above US$67 as Libyan output slows

5 May9:00 PM

[LONDON] Oil prices jumped more than US$1 a barrel on Tuesday, pushing North Sea Brent and US light crude to 2015 highs, after protests stopped crude flows to the eastern Libyan oil port of Zueitina, hampering exports.

Zueitina was one of the few Libyan ports still exporting oil as many others have closed due to fighting or disruptions at oilfields since the ousting of former dictator Muammar Gaddafi. "The protesters closed the pipeline to the port," said Mohamed El Harari, spokesman for state oil firm NOC, adding that several oilfields in eastern Libya would have to close.

Libyan oil output is now below 500,000 barrels per day (bpd), officials say, a third of what the country pumped before 2010.

A strong dollar also weighed on oil, making the commodity more expensive for holders of other currencies.

Brent crude oil climbed to a high of US$67.65 a barrel, up US$1.20 and its highest since Dec 8, before easing back slightly to around US$67.50 by 1215 GMT.

US crude oil jumped US$1.39 to a high of US$60.32 a barrel, also its highest since December. "Momentum is key here," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. "The rally is feeding itself with a lot of money looking for buying opportunities." "Nothing can really stop the price rally apparently," he told Reuters Global Oil Forum.

Hedge funds and money managers raised bets on rising Brent prices to another record, data showed on Monday, pushing net long positions to their highest since official exchange records began in 2011.

Civil war in Yemen has kept the oil market on edge, underpinning prices due to the risk of disruption to oil supplies from the country's northern neighbour, Saudi Arabia, or other Middle East Gulf producers.

The oil market is extremely well supplied, with producers of the Organization of the Petroleum Exporting Countries pumping almost 2 million bpd more than demand for their oil.

Opec meets next month to discuss production policy but analysts see little chance that it will restrain output as members battle for market share.

Investors awaited data on US crude oil stocks.

A Reuters poll on Monday said commercial crude stocks may have risen by nearly 2 million barrels last week, building for a record 17th straight week.

The US Energy Information Administration will publish its report on oil inventories on Wednesday.

REUTERS

    

US: Stocks dip as trade deficit swells 

5 May9:49 PM

[NEW YORK] Wall Street stocks opened lower on Tuesday after the US trade deficit surged more than 40 per cent in March to a six-year high.

Five minutes into trade, the Dow Jones Industrial Average was at 18,062.33, down 8.07 points (0.04 per cent).

The broad-based S&P 500 shed 1.45 (0.07 per cent) at 2,113.04, while the tech-rich Nasdaq Composite Index fell 12.86 (0.26 per cent) to 5,004.07.

The US trade gap was US$51.4 billion in March, jumping from a slightly upwardly revised US$35.9 billion in February, the Commerce Department said.

The increase reflected the impact of the strong dollar and a surge in imports after the West Coast port strike ended in late February.

Briefing.com analyst Patrick O'Hare said the weak trade data will take the estimate for first-quarter gross domestic product lower, perhaps into negative territory.

AFP

      

US trade deficit largest since 2008 as imports surge

5 May9:28 PM

[WASHINGTON] The US trade deficit surged to its highest level in nearly 6-1/2 years in March as imports rebounded strongly after being held down by a labour dispute at key West Coast ports, suggesting growth contracted in the first quarter.

The Commerce Department said on Tuesday the deficit on the trade balance jumped 43.1 per cent to US$51.4 billion, the largest since October 2008. It was the biggest percent rise since December 1996.

February's shortfall was revised to US$35.9 billion from a previously reported US$35.4 billion. Economists polled by Reuters had forecast the trade deficit rising to US$41.2 billion.

When adjusted for inflation, the deficit widened to US$67.2 billion in March, the largest in eight years, from US$51.2 billion the prior month.

March's trade gap was far larger than the US$45.2 billion deficit the government assumed in its snapshot of first-quarter gross domestic product published last week.

In that report, the government estimated trade sliced off 1.25 percentage points from GDP, helping to pull down growth to a 0.2 per cent annual pace. The economy expanded at a 2.2 per cent rate in the fourth quarter.

With March's trade deficit coming in bigger than assumed, growth is likely to be revised down to show a contraction when the government publishes its second GDP estimate later this month.

The now-settled labour dispute at the West Coast ports significantly slowed imports and exports at the start of the year. The dollar, which has gained about 12 per cent against the currencies of the United States' main trading partners since last June, has also weighed on trade.

In March, imports jumped 7.7 per cent, the largest increase on record, to US$239.2 billion. Some of the imports likely ended up in inventories, which in the first quarter recorded their biggest increase since the third quarter of 2010.

Imports of food and capital and consumer goods were the highest on record, while imports of industrial supplies and materials were the lowest on record.

Imports of petroleum products hit a record low, highlighting lower crude oil prices and increased energy production in the United States, which has reduced the country's dependence on foreign oil.

Exports increased 0.9 per cent to $187.8 billion in March. Petroleum exports were the lowest since February 2011. Exports to the European Union rose 8.6 per cent, with those to Germany reaching their highest level since October 2008.

The United States sold the fewest amount of goods and services to Brazil since April 2010. Exports to Canada and Mexico - the main US trading partners - rose in March.

Exports to China increased 13.6 per cent, while imports from that country jumped 31.6 per cent. That left the politically sensitive US-China trade deficit at US$31.2 billion, up 38.6 per cent from February.

REUTERS