Oil price up over petrol demand

Oil prices have risen nearly 9% after the US government reported an unexpected drop in crude stocks and an increase in demand for petrol. Prices were also supported by a rise in China's manufacturing index. China is the second biggest oil consumer
US crude stocks fell by 700,000 barrels for the last week of February.

US crude stocks fell by 700,000 barrels for the last week of February, while demand for petrol over the past four weeks was up 2.2% from a year ago. US light crude rose by $3.73 to $45.38.

"Overall the (US oil inventory) numbers are very bullish... again, gasoline remains the one bright spot in the market that can really pull the complex higher,"pointed out an analyst.

Stock markets around the world have been rising on Wednesday on hopes China will announce an expansion to its economic stimulus plan.However, an analyst at Oil Price Information Service said that crude inventories had been swollen for months and that oil prices won't move higher without some signs that the economic malaise has bottomed out.

"It's going to be a shaky year. The fundamentals are still poor," he added.

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Oil falls below $41 in Asia as US company, unemployment data reflect deep recession

Oil prices fell below $41 a barrel on Friday in Asia as soaring U.S. unemployment and bleak corporate results kept investors pessimistic about demand for crude."We’re seeing too much bad news coming out of companies," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. "If companies are still laying off workers, then economic reports are going to be pretty bad going forward.” With millions out of work, investors fear a downward spiral of falling consumer demand and company losses could lead to further job cuts and weakening crude demand reported the Associated Press.

The Dow Jones industrial average rose 1.3 percent Thursday.

Investors are also watching for possible further production cuts by the Organization of Petroleum Exporting Countries, which has already promised to reduce output by 4.2 million barrels since September.

Meanwhile Bloomberg reported Crude oil fell on concern that fuel demand in the U.S., the world’s biggest energy consumer, may decline as a report showed the number of newly jobless climbed to a 26-year high. A release today may show the jobless rate rose to 7.5 percent in January. Oil is poised for a 2 percent drop this week, the smallest weekly change in more than five months. Prices declined 10 percent last week.

Volatility Drops:
Oil prices have remained near the $40 level for the past five trading sessions. The 30-day historical volatility for crude oil has fall to 92.28 percent today, the lowest since Dec. 19, according to data compiled by Bloomberg.

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Yen,AUD,Rupee and Crude Oil Update

YEN
The yen fell, ending three days of gains versus the dollar and euro, after the Bank of Japan said it will buy 1 trillion yen ($11.1 billion) of shares held by financial companies, reviving demand for higher-yielding assets. Japan’s currency dropped from near a one-week high versus the greenback after the central bank said in a statement it will purchase the equities through April 2010 to boost the capital of financial institutions.

AUD
The Australian and New Zealand dollars also ended a three-day losing streak against the yen after the Australian government said it will spend 42 billion AUD ($26.8 billion) to help prevent the economy entering a recession. The Australian dollar gained after the central bank cut interest rates to the lowest since 1964 and the government announced a stimulus package to avoid a recession. New Zealand’s currency rose from near a six-year low.


RUPEE
India’s rupee strengthened the most in a week even as Asian stock gains tempered speculation overseas funds will increase equity sales. The rupee climbed as much as 0.4 percent to 48.7325 a dollar, the strongest intraday since Jan. 19, before trading at 48.775 as of 10:16 a.m. in Mumbai, according to data compiled by Bloomberg. All 10 most-active Asian currencies outside Japan strengthened.

OPEC
Crude oil rose in New York on speculation that OPEC, led by Saudi Arabia, cut its output in January to avoid a supply glut and bolster prices. Production from the Organization of Petroleum Exporting Countries averaged 28.565 million barrels a day last month, down 3.5 percent from December, according to a Bloomberg News survey of oil companies, producers and analysts. A government report yesterday showed U.S. consumer spending fell in December for a record sixth consecutive month, cutting fuel consumption.

The above is compiled news excerpts from Bloomberg.com.

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