CARACAS, May 15 (Reuters) - Venezuela's leftist President Hugo Chavez on Thursday offered to spend $365 million of the OPEC nation's oil income each year on a fund to help poor countries buy food and medicine.
He called on European and Latin American nations to contribute to the fund. (Reporting by Frank Jack Daniel; Editing by John O'Callaghan) ((frank.daniel@reuters.com; +58 212 277 2656; Reuters Messaging: frank.daniel.reuters.com@reuters.net)) Keywords: VENEZUELA POVERTY/
(Recasts, updates prices; changes dateline from LONDON)
NEW YORK, May 15 (Reuters) - Oil prices fell Thursday as a big increase in U.S. natural gas stocks weighed on the energy complex, spurring profit-taking from recent highs.
U.S. crude <CLc1> settled down 10 cents at $124.12 a barrel, after dipping as low as $120.75 a barrel earlier.
London Brent crude <LCOc1> settled 61 cents lower at $121.25 a barrel, after a power glitch halted trade was on the InterContinental Exchange platform for more than three hours. [ID:nN15287873]
"Natural gas gave us a negative tone at the start of the day. There's also likely a lot of people trying to get out of positions and lock in some profits," said Phil Flynn, an analyst at Alaron Trading in Chicago.
Natural gas futures <NGc1> fell 2 percent after a U.S. government report showed a larger-than-expected increase in stockpiles last week. [EIA/GAS]
The losses added to oil's $1.58 retreat Wednesday, which was prompted a bigger-than-expected rise last week in distillate stocks, easing concerns about tight diesel markets that sent heating oil and gas oil futures to record highs this week. [EIA/S]
Oil prices, which also hit a record this week just below $127 a barrel, have jumped six-fold since 2002, propelled by surging demand in China and other developing nations.
Some support came as the dollar weakened against the euro on Thursday, after data showing U.S. industrial production fell 0.7 percent in April, reflecting the biggest drop in the manufacturing sector since September 2005. [nN15269262]
Oil and the U.S. currency have become closely intertwined in recent months as investors have turned to oil as a hedge against the falling dollar.
SAUDI VIEW
Rising fuel costs have hit the economies of consumer nations, such as the United States, which already has been hit hard by the global credit crunch.
The Organization of Petroleum Exporting Countries has rebuffed repeated calls from consumers to increase output, however, blaming the weak dollar and speculative inflows into commodities for high prices.
Oil's rise has more to do with financial market volatility than fundamentals, Ali al-Naimi, oil minister of OPEC kingpin Saudi Arabia, said on Thursday, according to the text of a speech obtained by Reuters. [nSEO267530]
"The short-term oil price gyrations seen in recent years are more closely tied to the internal logic of the financial markets than to underlying supply/demand fundamentals," Naimi said.
OPEC's Monthly Oil Market Report provided more evidence that record oil prices are slowing demand growth, lowering its forecast for world demand growth to 1.16 million barrels per day, 40,000 bpd less than its previous forecast. [nL15510849]
Investment bank UBS raised its projection for oil prices on Thursday to $115 a barrel for 2008. [nL15322865]
The forecast for this year is the most bullish among banks polled by Reuters. UBS previously was the most bearish forecaster in a poll on April 25. [O/POLL] (Reporting by Richard Valdmanis and Matthew Robinson in New York; Additional reporting by Jane Merriman; Editing by Walter Bagley) and Alex Lawler in London, Maryelle Demongeot in Singapore) ((richard.valdmanis@thomsonreuters.com; +1 646 223 6056; Reuters Messaging: richard.valdmanis.reuters.com@reuters.net)) Keywords: MARKETS OIL
(Recasts, updates throughout)
NEW YORK, May 15 (Reuters) - Oil prices slumped $3 Thursday on profit-taking, tracking losses in natural gas after a surprisingly big inventory build.
U.S. crude <CLc1> fell $3.00 to $121.22 per barrel at 1707 GMT after hitting as high as $126.64 earlier in the day. Trade for London Brent crude <LCOc1> was interrupted by a technical glitch on the InterContinental Exchange platform.[ID:nN15287873].
The losses came as natural gas futures <NGc1> dropped two percent after a government report showed a larger-than-expected increase in stockpiles last week. [EIA/GAS]
"Natural gas gave us a negative tone at the start of the day. There's also likely a lot of people trying to get out of positions and lock in some profits," said Phil Flynn, analyst at Alaron Trading in Chicago.
The losses add to oil's $1.58 retreat Wednesday after U.S. government data that showed a bigger-than-expected rise last week in distillate stocks. [EIA/S]
The data eased concern about a tightening distillates market that has sent heating oil and gas oil futures to record highs this week.
Oil prices, which also hit a record this week just below $127 a barrel, are about six times higher than they were in 2002, propelled by surging demand in China and other developing nations.
Mitigating oil's losses Thursday, the dollar weakened against the euro after data showing U.S. industrial production fell 0.7 percent in April, reflecting the biggest drop in the manufacturing sector since September 2005. [nN15269262]
Oil and the U.S. currency have become closely intertwined in recent months as investors have turned to oil as a hedge against the falling dollar.
SAUDI VIEW
OPEC has rebuffed repeated calls from consumer countries to increase output, and has pointed to the weak dollar and speculative inflows into commodities as reasons for high prices.
Oil's rise has more to do with financial market volatility than fundamentals, Saudi Oil Minister Ali al-Naimi said on Thursday, according to the text of a speech obtained by Reuters. [nSEO267530]
"The short-term oil price gyrations seen in recent years are more closely tied to the internal logic of the financial markets than to underlying supply/demand fundamentals," Naimi said.
OPEC's Monthly Oil Market Report provided more evidence that record oil prices are slowing demand growth.
The exporter group trimmed its forecast for the increase in world oil demand in 2008 to 1.16 million barrels per day, 40,000 bpd less than its previous forecast. [nL15510849]
Investment bank UBS raised its projection for oil prices on Thursday. The bank's oil economist Jan Stuart raised its 2008 U.S. crude forecast to $115 a barrel. [nL15322865]
The forecast for this year is the most bullish among banks polled by Reuters. UBS previously was the most bearish forecaster in the poll last updated on April 25. [O/POLL] (Reporting by Richard Valdmanis; Additional reporting by Jane Merriman and Alex Lawler in London, Maryelle Demongeot in Singapore; Editing by John Picinich) ((richard.valdmanis@thomsonreuters.com; +1 646 223 6056; Reuters Messaging: richard.valdmanis.reuters.com@reuters.net)) Keywords: MARKETS OIL
(Adds OPEC report, updates prices)
By Jane Merriman
LONDON, May 15 (Reuters) - Oil rose on Thursday, boosted partly by weakness in the dollar versus the euro after strong economic growth data from France and Germany.
U.S. crude <CLc1> was up $1.55 a barrel at $125.77 by 1410 GMT.
London Brent <LCOc1>, whose nearby June contract expires later on Thursday, was up 92 cents at $122.78.
Oil had retreated on Wednesday from a record high near $127 a barrel reached in the previous session, pressured by U.S. government data that showed a bigger-than-expected rise last week in distillate stocks. [EIA/S]
The data eased concern about a tightening distillates market that has sent heating oil futures to record highs this week.
Strength in the euro against the dollar helped prices recover.
The dollar was further undermined by data showing U.S. industrial production fell 0.7 percent in April, reflecting the biggest drop in the manufacturing sector since September 2005. [nN15269262]
Oil and the U.S. currency have become closely intertwined in recent months as investors have turned to oil as a hedge against the falling dollar.
But strong emerging market demand and supply constraints are the main forces behind oil doubling in price in the past year.
The commodities rally is generally based on a lack of supply and increasing demand from developing countries, said Angus McPhail, of UK investment manager Alliance Trust.
"OPEC is holding back," he said, referring to the Organization of the Petroleum Exporting Countries output controls, while oil companies are slow to bring on more oil. "It's not an easy, quick fix."
OPEC has rebuffed calls from consumer countries to increase output, and has pointed to the weak dollar and speculative inflows into commodities as reasons for high prices.
SAUDI VIEW
Oil's rise has more to do with financial market volatility than fundamentals, Saudi Oil Minister Ali al-Naimi said on Thursday, according to the text of a speech obtained by Reuters. [nSEO267530]
"The short-term oil price gyrations seen in recent years are more closely tied to the internal logic of the financial markets than to underlying supply/demand fundamentals," Naimi said.
OPEC's Monthly Oil Market Report provided more evidence that record oil prices are slowing demand growth.
The exporter group trimmed its forecast for the increase in world oil demand in 2008 to 1.16 million barrels per day, 40,000 bpd less than its previous forecast. [nL15510849]
Investment bank UBS raised its projection for oil prices on Thursday. The bank's oil economist Jan Stuart raised its 2008 U.S. crude forecast to $115 a barrel. [nL15322865]
The forecast for this year is the most bullish among banks polled by Reuters. UBS previously was the most bearish forecaster in the poll last updated on April 25. [O/POLL] (Additional reporting by Maryelle Demongeot in Singapore and Alex Lawler in London; editing by James Jukwey) ((+44 207 542 4087, alex.lawler@reuters.com; Reuters Messaging: alex.lawler.reuters.com@reuters.net))
Keywords: MARKETS OIL
(Adds fund manager comment, updates prices)
By Jane Merriman
LONDON, May 15 (Reuters) - Oil rose on Thursday, boosted partly by weakness in the U.S. dollar after strong economic growth data from France and Germany pushed the euro higher.
U.S. crude <CLc1> was up 86 cents a barrel at $125.08 by 1102 GMT. U.S. crude oil options for June expire later on Thursday.
London Brent <LCOc1>, whose nearby June contract expires later on Thursday, was up 87 cents at $122.73.
Oil had retreated on Wednesday from a record high near $127 a barrel reached in the previous session, pressured by U.S. government data that showed a bigger-than-expected rise last week in distillate stocks.
The data eased concern about a tightening distillates market that has sent heating oil futures to record highs this week.
Strength in the euro against the dollar helped prices recover. Oil and the U.S. currency have become closely intertwined in recent months as investors have turned to oil as a hedge against the falling dollar.
But strong emerging market demand and supply constraints are the main forces behind oil doubling in price in the past year.
The commodities rally is generally based on a lack of supply and increasing demand from developing countries, said Angus McPhail, of UK investment manager Alliance Trust.
"OPEC is holding back," he said, referring to the Organization of the Petroleum Exporting Countries output controls, while oil companies are slow to bring on more oil. "It's not an easy, quick fix."
OPEC has rebuffed calls from consumer countries to increase output, and has pointed to the weak dollar and speculative inflows into commodities as reasons for high prices.
Oil's rise has more to do with financial market volatility than fundamentals, Saudi Oil Minister Ali al-Naimi said on Thursday, according to the text of a speech obtained by Reuters. [nSEO267530]
"The short-term oil price gyrations seen in recent years are more closely tied to the internal logic of the financial markets than to underlying supply/demand fundamentals," Naimi said in a speech due to be delivered in Seoul.
Investment bank UBS raised its projection for oil prices on Thursday. The bank's oil economist Jan Stuart raised its 2008 U.S. crude forecast to $115 a barrel. [nL15322865]
The forecast for this year is the most bullish among banks polled by Reuters. UBS previously was the most bearish forecaster in the poll last updated on April 25. [O/POLL] (Additional reporting by Maryelle Demongeot in Singapore and Alex Lawler in London; editing by James Jukwey) ((+44 207 542 4087, alex.lawler@reuters.com; Reuters Messaging: alex.lawler.reuters.com@reuters.net))
Keywords: MARKETS OIL
Next: UPDATE 3-Oil recovers towards $125, eyes dollar