Don't think we won't yet reach $50/barrel.
Oil prices hovered just below $47 a barrel Wednesday, awaiting a U.S. report that was expected to show a big drop in fuel stocks after Hurricane Ivan disrupted operations.Ten minutes until release . . . I'll update soon on what the EIA has to say.
Meanwhile, U.S. light crude for November delivery rose to a peak at $47.04 a barrel, just $2.36 off the all-time high at $49.40 struck Aug. 20 before easing back to $46.70. London Brent for October delivery fell 14 cents to $43.25 a barrel.
Meanwhile, heating oil futures bubbled at record levels as concerns grew that stocks of heating fuels in Japan, the United States and Europe could prove inadequate for the upcoming northern hemisphere winter.
"We are very worried by heating oil supplies in Japan, the United States and Europe," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. "Another attack on the record at $49.40 is possible over the next few months."
Industry analysts are expecting U.S. crude inventories to drop by a hefty 5.5 million barrels for the week to Sept 17 when the government Energy Information Administration (EIA) releases its weekly oil report at 10:30 a.m. ET Wednesday.
It would be the eighth crude draw in as many weeks and would take stocks to a deficit of more than eight million barrels versus the same time last year.
UPDATE: For the week (year) ending 9/17, crude oil stocks -3.3% (-4.9%); gasoline, -1.4% (+1.8%); fuel oil, -1.2% (-1.8%). In the EIA's words, "At 269.5 million barrels, U.S. crude oil inventories are well below the lower end of the average range for this time of year." The Strategic Petroleum Reserve continues to grow, however, up 0.1% for the week and +7.8% from a year ago. Don't count out Dubya tapping the Reserve before Election Day just yet.