|
|
| • EXCH RATES |
|
Baht/$ 33.35/39
Bid/Ask
|
GOLD |
14,650
- 50
|
|
West Texas Intermediate (WTI) prices hit new record highs in almost every session last week, passing $145 a barrel on Thursday amid a weak dollar and ongoing supply concerns.
The US dollar slumped to the lowest level since April 23 against the euro as the European Central Bank decided to raise its interest rate by 0.25 points to 4.25% on Thursday to curb inflation.
The continued declines in the dollar and global equity markets made energy commodities relatively attractive for speculative funds. Tensions between Israel and Iran over the latter's nuclear programme appeared to be worsening and continued to bolster oil prices.
It looked more likely that Israel would attack Iran's nuclear facilities. Iran warned it would impose controls on shipping in the Gulf and the strategic Strait of Hormuz, where 40% of the world's oil supply passes through, if it were attacked. Crude prices also surged as US crude stocks surpassed expectations to an uncomfortable level below 300 million barrels for the first time since January, raising greater supply concerns.
Moreover, the International Energy Agency reported that the oil market remained tight in the medium term, as global supplies struggle to keep pace with demand. The agency cut its global oil supply growth forecast by 2.7 million barrels per day to 95.33 million bpd by 2012.
The crude market outlook is expected to be bullish given the dollar weakness, geopolitical risks, and supply and demand fundamentals. However, we might see some downward corrections if crude prices reach the psychological level of $150. Talk of ''demand destruction'' could prevail.
Gasoline prices in Singapore hit a new record above $147 a barrel last week, primarily driven by soaring crude prices. However, the gasoline market was weighed down by growing spot supplies, especially from India and South Korea. Supplies are being increased by North Asian refineries returning from regular maintenance. Steep freight rates have also shut the arbitrage opportunity to ship gasoline out of the region.
On the demand side, gasoline consumption in Asia has declined dramatically in recent weeks due to higher prices. Hence, we expect to see surplus gasoline supplies within the region. This will put more downward pressure on the Asian gasoline market.
Even news of refinery outages in Japan and Taiwan recently failed to improve market sentiment.
Diesel prices in Singapore climbed to an all-time high of above $180 a barrel last week, supported by crude price spikes and strong activity in diesel and heating oil futures in Western markets.
European demand for diesel was strong, with the region importing jet fuel and diesel cargoes from Asia and the US. In Asia, China bought additional diesel scheduled for July arrival to cover domestic demand.
However, demand in Asia is understood to be cooling off due to soaring diesel prices. Last week, Pakistan and Bangladesh raised domestic retail prices by 10% and 37.5% respectively. This is likely to curb demand in Asia further. There are also signs that the Chinese government will not extend the import tax rebate into the third quarter, thereby discouraging Chinese diesel purchases in the near future.
Prepared by Thai Oil Plc
Prev
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Next
