Need To Know News

The energy complex finished higher across the board with Crude up 0.8% to 115.47, Unleaded gaining 1.6% to 291, Heating Oil rising 1.4% to 316.65 and Natural Gas adding 1.3% to 8.082.

Crude rallied for much of the afternoon to reverse its morning losses. Today was the last day of trading for the September contract, and traders may have been unwinding their month-long shorts or rolling over their positions into the October contract. October Crude closed at 115.59.

Natural Gas also rallied in the afternoon, breaking through resistance at the $8 level. Tomorrow resistance will be at the 9-day moving average of 8.171 with support at $8.

Heating Oil continued to be supported by the 200-day moving average (306.10). For the second straight day, the 320 level served as resistance.

The finance ministers of the G-7 today issued the following statement:

“G-7 Finance Ministers welcome the international mediation efforts to end the hostilities and to bring about a political solution to the conflict in Georgia. The loss of life, humanitarian suffering and wider destruction over recent days is considerable, and we welcome commitments to assist with the urgent humanitarian needs.

“We, the G-7, stand ready to support Georgia in order to promote the continued health of the Georgian economy, maintain confidence in Georgia’s financial system and support economic reconstruction.

“In this regard we welcome the commitment by Georgia and the International Monetary Fund to work together to reinforce the soundness of Georgia’s economic reform program. We also call on the Georgian authorities, other countries, the World Bank, European Bank for Reconstruction and Development, Asian Development Bank, European Investment Bank, and European Commission to promptly identify and support reconstruction needs and the restoration of services that will build a base for future economic growth.

“Georgia has solid economic fundamentals as a result of economic reforms and sound policies, and we are committed to helping Georgia continue on this path.”

The EIA also said oil demand won’t decline as much in H2 as in H1. Non-OECD nations will see strong growth in demand.

Petro-Canada, Canada’s fourth largest oil producer, said a fire in the 450k barrel storage tank at the Ras Lanuf, Libya, petrochemical and refining facility has not affected field operations in the country, nor is it likely to have a significant financial impact.

According to a company statement the tank is owned by Harouge Oil Operations, a joint venture with Libya’s National Oil Co., 49% owned by Petro-Canada.

Just 2 months ago, Alberta-based Petro-Canada signed 6 long-term exploration and production agreements with the Libyan state oil company that would see the joint venture invest $7bln on an oil field redevelopment program at Ras Lanuf facility and double production to 200k barrels a day over the next 5 to 7 years.

Crude is now at its lows of the days, down 1.5% at 112.84. Crude had seemingly bounced back after immediately knee-jerking lower after inventory data was released; however, the recovery proved to be short lived, and Crude has sold off ever since. It plunged through yesterday’s close of 114.53, and also broke through the 113 level after briefly holding support there. Support now lies at yesterday’s low of 111.64.

Natural Gas is down 0.4% to 7.943. Natural Gas has been positive for most of the session, but plunged below $8 after Crude inventories came in significantly higher-than-expected. Natural Gas almost immediately spiked back to pre-data levels (approx 8.10), but soon reversed course again to breach the $8 level once more.

Crude immediately plunged to 115.13 from 117 after Crude inventories came in much higher than expected, but has recovered to 115.70. Crude is currently up 1% on the day.

Unleaded: Down 6.202mln vs. 6.394mln draw prior

Distillates: Up 481k vs. 1.759mln draw prior

Refinery Usage: Down 0.2% vs. 1.06% decline prior