NYMEX Crude Rises Above $81/barrel After 0.6% Decline, According to Reuters

Oil Prices Rise as U.S. Stockpiles Drop

Tokyo, Nov 24 (Reuters) – U.S. crude futures increased slightly, surpassing $81 per barrel on Wednesday, following a 0.6 percent decline the previous day. The price rise was supported by larger-than-expected reductions in U.S. oil product inventories.

This uptick occurred despite a strengthening dollar amidst ongoing tensions on the Korean Peninsula.

Market Fundamentals

• NYMEX crude for January delivery climbed 20 cents to $81.45 a barrel by 0055 GMT, recovering from a previous close of $81.25, which had fallen 49 cents amid concerns over a potential worsening of the eurozone crisis and recent North Korean provocations.

• According to the American Petroleum Institute (API), gasoline inventories decreased by 499,000 barrels, while distillate stocks fell by 311,000 barrels. This was significantly lower than expectations from a Reuters poll, which had predicted a 1.2 million barrel drop in distillate stocks and a 600,000 barrel decline in gasoline supplies.

• U.S. crude oil inventories unexpectedly rose by 5.2 million barrels due to increased imports for the week ending Nov. 19, contradicting the anticipated 2.1 million barrel decline.

• South Korea issued a stern warning to North Korea of "enormous retaliation" should it escalate its aggressive actions, following a significant artillery attack on a South Korean island—one of the most intense incidents since the Korean War ended in 1953.

• The U.S. Commerce Department revised its estimate for third-quarter GDP growth to an annual rate of 2.5 percent, up from the previous 2 percent, reflecting stronger-than-expected consumer spending and exports.

• The Qatari Energy Minister indicated that OPEC is unlikely to alter production quotas in its upcoming December meeting if oil prices remain stable.

• A leak prompted the shutdown of a Sunoco Logistics oil pipeline in Texas, with approximately 100 barrels of crude spilled.

Market Insights

• U.S. stock markets fell on Tuesday as investors shifted away from riskier assets due to rising geopolitical tensions in Korea and growing concerns about eurozone debt.

• The euro hit two-month lows in early Asian trading, suggesting further declines may be forthcoming as the eurozone debt crisis and heightened tensions in Korea supported the dollar.

Upcoming Data and Events

Key economic data to be released on Wednesday includes:

• Germany’s Ifo business climate and expectations for November.
• U.S. mortgage index, personal income figures, initial jobless claims, and durable goods data for October.
• U.S. figures on new home sales and monthly changes in home prices.

Current Oil Prices (as of 0055 GMT)

• NYMEX Crude (January): $81.45 (+0.20)
• Heating Oil (December): $224.87 (-0.09)
• RBOB Gasoline (December): $213.35 (-0.07)
• Natural Gas (December): $4.246 (-0.018)

(Note: Prices for U.S. heating oil and RBOB gasoline are listed in cents per gallon.)

(Reporting by Osamu Tsukimori; Editing by Edwina Gibbs)