Crude Oil Stronger on Strong Eco Data

After climbing on Monday morning, US crude-oil gave back most of their gains as fresh manufacturing data revived concerns about energy demand. Oil futures were in sharp retreat after Monday’s release by the Institute of Supply Management of its index on manufacturing activity. The ISM’s U.S. manufacturing purchasing managers’ index unexpectedly fell to 49.5 in November from 51.7 in October. The November reading was the lowest since July 2009. A reading above 50 indicates expanding activity. The oil market also picked up momentum from Chinese manufacturing data and ongoing strife in the Middle East. But by the closing, oil was only barely in positive territory. Analysts at J.P. Morgan Monday put an estimate to the hit to oil markets if the U.S. goes over the fiscal cliff. J.P. Morgan said such an outcome would trim global oil demand growth by about 580,000 barrels a day, or about half the 1.2 million oil demand growth forecast by the bank for 2013. The bank noted that its baseline forecast holds that Washington policy makers will reach an agreement to avoid such an outcome

By late in the day on Monday, crude oil prices reversed again and ended higher for a third consecutive day, on a weak dollar as US fiscal problems hit the new wires again.

This morning crude is trading down following yesterday’s pattern. By the close on Monday crude was up over 1.00 to trade in the high 89 price range. This morning in the Asian session crude is off by 41cents trading at 88.67.

On Monday news showed that 7 countries that were given exemptions from US sanctions targeting Iran’s energy sector have stayed committed to alternatives, a US officials said.  India, Turkey, South Korea, Sri Lanka, Taiwan, Malaysia and South Africa were given exemptions last summer from US sanctions targeting the Iranian oil sector because of reductions in crude oil imports from the Islamic republic. Those waivers expire on Saturday. The 20 nations that import crude oil from Iran have all backed from Tehran as sanctions pressure increased. The International Energy Agency said Iranian oil exports, however, increased from a year low of 1 million barrels per day in July to 1.3 million bpd in October. Iranian Oil Minister Rostam Qasemi said Iran has the capacity to produce as much as 4 million barrels of oil and 2.1 trillion cubic feet of gas per day

Natural gas prices recovered from 2-week lows, as forecasts of cooler temperatures next week helped prices regain some on its losses. In early morning trading gas prices are above $3.60 with gain of more than 0.30% in international market. Yesterday’s Woodside Petroleum Ltd.’s purchase of a stake in Israel’s largest natural gas deposit takes Asia- Pacific oil and gas acquisitions to a record $99 billion this year, tying the U.S. for the first time.  Australia’s second-largest petroleum producer yesterday said it will pay partners including Noble Energy Inc. an initial $696 million and as much as $2.3 billion for part of the Leviathan field.