Crude below $95.50 as capacity on the Seaway pipeline was reduced while inventories may rise further
2013-01-24 07:56:53 GMT (ecPulse)
The amount of oil moving through a key pipeline to the U.S. Gulf Coast had been cut by half amid growing supplies, while crude inventories may have climbed by 2.2 million barrels last, pushing crude near the lowest in a week. Crude is trading as of this writing around $95.47 a barrel compared with the opening at $96.46 and with the highest at $95.60 and the lowest at $95.11. Crude finds on the short term resistance at $96.15 and support at $95.50 then $95.35. The Seaway pipeline, which takes crude from Cushing, Oklahoma, to the U.S. Gulf Coast, was limited to 175,000 barrels a day at the Jones Creek terminal, from the normal capacity of 400,000 barrels a day, amid rising inventories which already are at record highs. “The Seaway pipeline issue may have triggered some long liquidation although the market is now back to normal. WTI hit this year’s high yesterday so it’s a good time for some correction, some profit taking”, said Ken Hasagawa from Newedge Group in Tokyo. Moreover, according to the weekly report from the American Petroleum Institute crude inventories rose 3.2 million barrels last week from 1.8 million expected, while the EIA report later today may show inventories climbed 2.2 million barrels. Caution is also adding to the downside pressures on oil prices after Apple’s disappointing results and ahead of the U.S. jobless claims, euro zone’s trade numbers and Germany’s manufacturing data, while in Japan the trade deficit rose to a record $78 billion in 2012. Yet, the downside movement seen today may be limited as crude is finding support from China’s upbeat manufacturing data that improve the outlook for global growth and fuel demand from the world’s second largest oil consumer. Manufacturing in China is expanding at the fastest rate in two years, providing signs of further economic rebound. The preliminary reading of HSBC’s Purchasing Managers’ Index was 51.9 in January from 51.5 final reading in December. Moreover, fears of a possible default by the United eased yesterday after a plan that would allow the federal government to keep borrowing money through mid-May passed, strengthening believes that the world economy will perform slightly better this year. Brent is trading as of this writing around the $112.75 after falling 0.04%; natural gas is trading at $3.518 per 1,000 cubic feet after rising 0.76%; gasoline is trading at $2.813 a gallon after rising 0.24%; heating oil is trading at 3.0813 after rising 0.10%.
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