Libyan Oil: Will Increased Production Help Lower Oil Prices?

  • June 29, 2005
  • TradingMarkets Editors

The EIA said crude inventories rose 1.1 million barrels, more than
expected; gasoline rose 300K barrels; distillates rose 1.7 million barrels, more
than expected.

The economy grew at a faster pace than originally thought. Q1 final GDP
was revised higher, to 3.8%. More new homebuilding and stronger exports were
cited. For Q4 2004, GDP also grew at 3.8%.

The FOMC begins a two-day meeting today. Economists are looking for a quarter-point
rise–to 3.25%–and no major change in the policy statement. Specifically, the
words “accommodative” and “measured pace” are expected to remain intact. It is
also quarter end and half-year end. It will be the ninth increase in the past
year.

AAA said it expects more drivers to hit the road this July 4 weekend than
did during Thanksgiving. This, despite higher gasoline prices.

T. Boone Pickens said on Monday he sees gasoline reaching
$3/gallon within a year.

BP Chairman John Browne is in talks with Libya’s Muammar
Qaddaffi, hoping to land an exclusive deal. Libyan oil production was 3.28
million bpd in the 1970s and is about half that now.

Among newsletter writers, 55.1% are bullish, the highest level since
March. Bears are 19.1%, the lowest figure since December.

Brice Wightman

 

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