TOKYO, May 9 (Reuters) - Oil held near record highs above
$124 a barrel on Friday, as a surge in heating oil futures
following sharp declines in stocks triggered heavy buying by
investment funds.
Funds were keen to shift their money into the oil market
after seeing U.S. crude rise about 13 percent since the start
of the month, but some traders said they were wary about
extending their buying as recent rallies have been too rapid.
U.S. crude for June delivery <CLc1> rose 67 cents at
$124.36 a barrel by 0356 GMT on the Globex electronic trading
platform, after reaching another record high of $124.61 on
Thursday.
London Brent crude <LCOc1> rose 77 cents to $123.61 per
barrel.
"Funds are pouring into the crude market as prices have
been performing extremely well," said Tatsuo Kageyama, analyst
at Kanetsu Asset Management in Tokyo.
"Lingering geopolitical fears and high heating oil prices
are helping the market, but the speed of the rise is too fast."
Gains in U.S. crude picked up momentum after distillate
stocks in the United States, including heating oil, fell.
The U.S. Energy Information Administration (EIA) said on
Wednesday domestic distillate stocks, which include heating oil
and diesel, fell 100,000 barrels last week, to 105.7 million
barrels, against forecasts for an 800,000-barrel rise. []
NYMEX June heating oil <HOM8> was up 0.87 cents at $3.5185
on Globex, after reaching a record high of $3.5310 a gallon the
previous day.
"I'm not particularly surprised by the speed of the rise in
crude. There are many market bulls hoping for prices to rise
heading into the summer," said Tetsu Emori, fund manager at
Astmax Co Ltd in Tokyo.
Yet, the recent recovery in the dollar against the euro
<EUR=> was negative for oil, traders said.
Producers were also ready to provide more supplies.
World oil markets have enough supply now, but the
Organization of the Petroleum Exporting Countries is willing to
pump more if needed to keep pace with demand, Abdullah
al-Badri, the group's secretary-general, said on Thursday.
[]
OPEC exports, excluding from Angola and Ecuador, will rise
by 220,000 barrels per day (bpd) in the four weeks to May 24 on
Asian demand and a recovery in Nigerian supplies after a strike
that crippled output, said British consultancy Oil Movements.
[]
The euro was little changed against the dollar on Friday
after rebounding from a two-month low on reduced expectations
for European Central Bank rate cuts.
"It's basically crude oil and grains in commodities which
are doing well and funds are shifting in those markets. But the
strength of the dollar is not necessarily positive for oil,"
Kanetsu's Kageyama said.
Traders will be watching the release later on Friday of
U.S. international trade data for March (1230 GMT) and the
Economic Cycle Research Institute weekly index (1430 GMT) for
potential price guidance.
(Reporting by James Topham and Chikafumi Hodo; Editing by
Ramthan Hussain)
