Oil has an Up Day, EIA Report Seen as Bullish, Cigar Lake Floods Again
Aug 14th, 2008 | By Doug Casey | Category: Financial News, Oil Investment & Alternative EnergyIn the energy market Wednesday, crude for September delivery shot higher for a change, closing at $116.00/barrel, up $2.99. September reformulated gasoline rose 8.9 cents, to $2.9323/gallon.
In its weekly inventory report, the Energy Information Administration said the crude stocks dropped by 400,000 barrels for the week ending August 8. Gasoline supplies plunged by 6.4 million barrels, marking a decline of more than 14 million barrels in three weeks.
Distillate stocks were off 1.7 million barrels, while refineries were operating at 85.9% of capacity, down from 87% a week earlier, the EIA said.
“Capacity utilization is now at a four-month low, reflecting refiners’ reluctance to process crude oil,” wrote Chris Lafakis, of Moody’s Economy.com. “Every major crude-oil refiner reported losses in its refining business in the second quarter … As a result of this financial stress, refiners are curtailing their processing efforts.
“Nonetheless, a sustained increase in gasoline demand will boost the gasoline crack spread and coax refiners to boost production,” Lafakis believes.
He also noted that “gasoline demand is now less than 2% below its year ago level … Evidence of stronger demand cuts to the core of the ‘demand destruction’ thesis, which has been the primary catalyst pushing crude-oil prices lower.”
In the uranium sector, Cameco (CCO) announced further flooding at its Cigar Lake project, the world’s richest undeveloped uranium deposit, with the potential to one day meet 10 percent of global demand. The company didn’t say what new remediation efforts will be necessary, nor if the projected 2011 startup date would be affected.
Source: Oil has an Up Day, EIA Report Seen as Bullish, Cigar Lake Floods Again
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