Broadgate: Market News 28/3
28 March 2012
Oil declined for the first day in four in New York amid speculation from investors that rising U.S. stockpiles signal that fuel demand may falter in the world’s biggest crude-consuming nation.
This concern comes after the U.S. said it has considered tapping its Strategic Petroleum Reserve and the Wall Street Journal reported that Iran will resume talks on its nuclear program. The release of oil from the Strategic Petroleum Reserve “has been in consideration for some time,” according to Charles McConnell, the acting assistant secretary for fossil energy, at a hearing in Washington yesterday, but he insisted that no decision has been made yet.
U.S. gasoline consumption slipped below year-earlier levels for the 30th consecutive week, according to MasterCard’s SpendingPulse report. The average pump price rose 4 cents in the past week to $3.88 a gallon, the highest price since May 20. The median of 12 analyst estimates in a Bloomberg News survey indicates that stockpiles of the motor fuel are estimated to fall 1.6 million barrels in today’s Energy Department report.
Oil prices are also being supported as Japan consumes the commodity at the fastest pace in four years for its electricity generation. The nation is running out of capacity to use liquefied natural gas to replace idled nuclear power.
European stocks fell for a second day and commodities slid after the French economy grew less than expected. France’s economy grew just 1.3 percent in the fourth quarter, less than the 1.4 percent expansion forecast by economists, government data revealed.
The euro currency strengthened 0.2 percent to $1.3341. Italian Prime Minister Mario Monti said in a speech in Tokyo that the euro area’s debt crisis is “almost over.”
The yen gained versus all of its 16 major counterparts as investors flocked to safe-haven assets amid a decline in Asian equities. The currency also strengthened on speculation that Japanese companies will repatriate overseas earnings before the March 31 end of the fiscal year.
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