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Oil prices rise as demand surges

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Crude oil futures rose on Monday as firm global demand offset a strong dollar, although a holiday in the United States and much of Europe kept trading muted.

Front-month Brent crude <LCOc1> gained 53 cents to $65.90 a barrel by 1750 GMT (01:50 p.m. EDT), after touching an intraday low of $64.72. U.S. crude <CLc1> was up 8 cents at $59.80 a barrel.

The market drew support from figures showing strong demand across Asia and the United States.

“Global oil demand continues to surprise to the upside, with April data showing no signs of slowdown despite a pick-up in prices,” Energy Aspects said in a note.

Japan’s customs-cleared crude oil imports rose 9.1 percent year-on-year to 3.62 million barrels per day (bpd) in April, the Finance Ministry said.

In China, crude imports hit a record 7.4 million bpd last month, with healthy car sales countering a slowing economy.

In the United States, the peak summer driving season started with Memorial Day on Monday, and the American Automobile Association said road travel was expected to reach a 10-year high over the long weekend.

The dollar held near two-month highs against the euro <EUR=> and yen <JPY=>, as well as a one-month peak against a basket of currencies <.DXY>.

A strong dollar makes greenback-denominated crude oil less attractive for holders of other currencies.

“The overall fundamentals still point to a well-supplied market, a fact that should continue to put a ceiling on prices,” Barclays said.

Iran plans to raise its oil output by 170,000 bpd by March 2016, the official IRNA news agency cited an Iranian oil official as saying.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), aims to boost crude exports by up to 1 million bpd if Tehran and six major powers finalize a nuclear agreement by a June 30 deadline.

Unrest in the Middle East intensified on Monday as Islamic State poured fighters into the western Iraqi city ofRamadi.

In oil exporter Libya, warplanes from the official government attacked an oil tanker docked outside the city of Sirteon Sunday, wounding three people and setting the ship on fire, officials said.

It was the third confirmed strike by the internationally recognized government on oil tankers, part of a conflict between competing administrations and parliaments allied to armed factions fighting for control of the country.

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56 Comments on "Oil prices rise as demand surges"

  1. Northwest Resident on Wed, 27th May 2015 12:51 pm 

    Ron Patterson says: Northwest Resident is referring to the below chart:

    (chart from http://www.spr.doe.gov/dir/dir.html displayed)

    I haven’t a clue as to what it is all about. That is an awful lot of oil. The total fill barrels, whatever that means, for all three months comes to six times the total of all SPR storage barrels.

    ————-

    Go to Ron’s site and scroll to the bottom of the page. There is something VERY STRANGE going on here guys. Don’t miss this.

    http://peakoilbarrel.com/opec-according-to-the-eia/

  2. Northwest Resident on Wed, 27th May 2015 12:53 pm 

    marmico — From your link posted:

    “Washington, D.C. – The U. S. Department of Energy announced today the award of contracts for delivery of crude oil to the Strategic Petroleum Reserve. BP Products North America, Inc., will deliver 2,197,500 barrels and Noble Americas will deliver 2,000,000 barrels to the Reserve’s Bryan Mound site in Freeport, Texas. Deliveries are expected to be completed by July 31, 2015.”

    2.197 million plus 2 million = 4.197 million barrels of oil.

    But SPR is moving total of 4200 million barrels (not 4.197) in May through July timeframe. Big difference.

  3. marmico on Wed, 27th May 2015 1:26 pm 

    spreadsheet in error

  4. Northwest Resident on Wed, 27th May 2015 2:05 pm 

    marmico — Since, we’re talking about government employees here, you could be on to something. Spreadsheet error — that could be the answer. In fact, now that you mention it, I’m guessing that is probably exactly what it is. Three screw-ups in a row — one for May, one for June and one for July — it figures. The alternative would be far too conspiratorial and sinister… 🙂

  5. tita on Wed, 27th May 2015 2:10 pm 

    Sometimes people do a typo mistake, that’s all.

    And just to imagine that SPR would move 4.2 trillions barrels in two months? Come on!!

  6. Northwest Resident on Wed, 27th May 2015 2:33 pm 

    tita — I think that would have been 4.2 billion, not 4.2 trillion. But still, your point is just as valid. The FED/SPA buying and moving 4.2 billion barrels of oil would be quite an event. My curiosity is pacified — stupid mistake in posting hundreds of barrels instead of millions of barrels — they were ONLY off by a about 4.196 billion barrels — nothing to get alarmed about.

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