Crude reaches $75 amid record snowfall in US, IEA raises 2010 oil demand forecasts

Crude futures rose today as the unusually cold weather continued blasting the US with the northeast of the country experiencing record snowfalls, which boosted the demand for heating fuel, while Europe moved closer to resolving Greece's debt problem.
Oil prices slightly retreated yesterday after an update from the API (American Petroleum Institute) showed an unexpectedly high increase in crude inventories of 7.195 million barrels last week, while a Platts survey projected a 2 million barrel rise. Gasoline stocks were up 1.552 million barrels, while distillate stocks declined by 1.53 million barrels.
Refinery utilization rate also fell, moving down from 78% to 77% to signal lower demand.
The prices were supported by yesterday’s reports of Germany’s plans to put together an aid package for debt laden Greece. Today, leaders of France and Germany announced they had agreed on a rescue plan for Greece, providing no further details.
April Brent Crude reached US$73.40/barrel in London, while US light, sweet crude climbed to US$75.41/barrel on the New York Mercantile Exchange.
The International Energy Agency (IEA) raised its global oil demand forecasts for 2010 by 120,000 bopd (barrels of oil per day) to 1.6 million bopd. However, oil cartel OPEC (Organization of Petroleum Exporting Countries) cut its own consumption projection to 800,000 bopd, while increasing the forecast for its supplies in 2010 by 150,000 bopd.
Politics has also factored in crude’s movements as OPEC’s second largest producer Iran is currently dealing with pressure from the international community after advancing its uranium enrichment programme. The US and the UK have already called for further sanctions against the state, contributing to the increase in crude prices.
The inventories data from the US Energy Information Administration (EIA), whose release was initially scheduled for today, will come out on Friday as the government’s offices were closed due to heavy snowfall.
Blue chip oil and gas stocks advanced today. Supermajors Shell (LSE: RDSB) and BP (LSE: BP) added 2% and 1% respectively. BG Group (LSE: BG) and Tullow Oil (LSE: TLW) also tacked on 2%, while Cairn Energy (LSE: CNE) took the lead with a 3% gain.
Engineering firms Petrofac (LSE: PFC) and Amec (LSE: AMEC) climbed 2.5% and 1.2% respectively.
All midcap producers followed the trend with the exception of Heritage Oil (SLE: HOIL), which slid 1.5%.
Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) were the top performers in the sector in the FTSE 250 with gains of 3%. Soco International (LSE: SIA) moved up 2.2%, JKX Oil and Gas (LSE: JKX) and Salamander Energy (LSE: SMDR) added 1.5%, Premier Oil (LSE: PMO) tacked on 1.3% and Melrose Resources (LSE: MRS) added less than 1%.
Wood Group (LSE: WG) climbed 2.3%, while fellow services company Wellstream Holdings (LSE: WSM) rose marginally.
EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) rallied 12% to lead the small caps. North American based explorer Nighthawk Energy (AIM: HAWK) followed with a 3.5% gain.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and Africa focused energy company Dominion Petroleum (AIM: DPL) headed in the opposite direction, shedding 4.5% and 4% respectively.

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