Oil producers have increased their sales for the first time in four weeks

Oil producers have increased their sales for the first time in four weeks to lock in profits near $ 90 a barrel, reversing a two-year contango and increased speculation that stocks will decline.

Producers and traders increased their net short positions called in crude futures and options by 13 percent in the week ended Dec. 7, the pricing for the output of the wells, the Commodity Futures Trading Commission said in its Commitments of Traders report. It was the second largest in sales in two years.

covering oil for future delivery pressure of the longer maturity contracts, erasing the deferment or premium paid for subsequent shipments. Hedge funds as exaggerated as oil for delivery in December 2011 began trading at a premium to December 2012 for the first time since the week that Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008.

"The producers looked at prices of $ 90 and said it would take some of that," said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. "Hedge funds say, 'We are at $ 90, OPEC does not seem to care and markets are shrinking."

Crude oil for December delivery was established in 2011 $ 90.14 a barrel on December 3, 1993 cents more than the future of December 2012, which closed at $ 89.21 on the New York Mercantile Exchange. The premium will be widened to a record $ 1.50 on 6 December. January crude oil ended 10 December delivery at $ 87.79.

Short positions

The net short positions of producers and traders reached a minimum of two years the week ended November 30 at the increase in sales expanded its position to 153,992 net short futures and options to combine the week ended 7 December. It was the biggest advance in net short positions and the seven days ended Oct. 26, which was the biggest sell-off in two years.

"The increase in sales positions of producers and net short-confirms that producer hedging, forward sales, was a key factor in the flattening of the breakthrough curves of crude oil in the last week," said Michael Wittner, head New York's oil market research at Societe Generale SA.

Hedge funds and other large speculators increased their bullish bets more than nine weeks, increase the net positions of call time, or bets that prices will rise, by 26 percent, showed the report of the CFTC.

The Organization of Petroleum Exporting Countries, which produces about 40 percent of world supplies, decided at a meeting Dec. 11 in Quito, Ecuador, to maintain current oil production quotas.

The group, which meets in June, has not altered its official ceiling since December 2008 when it announced cuts supply register and a fee of 24.845 million barrels a day. OPEC has breached its production quotas this year by an average of 1.934 million barrels a day, most of the last six years.

The decline in reserves

The current price ratio, known as backwardation, is an incentive for traders to liquidate inventories, said Andy Lipow, president of Lipow Oil Associates LLC in Houston. In a contango market, traders cover transport, insurance and storage in the futures delivery point for New York in Cushing, Oklahoma, with the sale of oil for future delivery at a higher price than today. As the curve is inverted, it becomes impossible, he said.

"There is no contango compensation for tenants who have to pay monthly fees of storage at Cushing," said Lipow. "As a result, one can expect that Cushing inventories starting in the new year will be liquidated."

U.S. inventories fell more than expected last week, falling by 3.82 million barrels to 355.9 million dollars. Supplies are expected to decline from 1.4 million, according to the median estimate of 16 analysts surveyed by  us.

Oil shares

Total stocks of U.S. oil, including diesel, gasoline and crude, fell 43 million barrels to 1.101 billion since reaching a record in the week ended Sept. 17, according to an Energy Department report on 8 December.

"The most bullish of oil look at the forecasts of the demand," said Lipow. Prospects for the U.S. and demand around the world have increased, he said.

The International Energy Agency raised its forecast for world demand for 2011 in its monthly report on the oil market on 10 December. Global oil use will average 88.8 million bpd next year, up 1.6 percent this year and about 260,000 barrels more than expected in November.

U.S. demand rise 2 percent to 19.18 million bpd next year, according to the Paris-based adviser to oil-consuming countries.

Hedge Funds

Managed money, including hedge funds, pools of commodity trading advisors and commodity, increased net long positions by 42,603 futures and options combined to 206,807 the week ended December 7 According to the report of the CFTC.

In other markets, the net positions along the combined futures and options contracts on four natural gas futures rose 28920.8 equivalent, or 40 percent, to 100,567.8 for the week ended on 07 December, the highest since August was the report of the CFTC.

The measure of net longs includes an index of four contracts adjusted to the equivalent futures: the NYMEX natural gas futures, Nymex Henry Hub Swaps, NYMEX Henry Hub Swaps and penultimate ICE Henry Hub Swaps. Henry Hub in Erath, Louisiana, is the delivery point for Nymex futures exchange, the reference prices for fuel.

Managed money bullish long-term commitment to gasoline rose 4.6 percent, the weekly sessions, 68,434 futures and options combined, the CFTC data showed. Net-long betting heating oil increased by 56 percent, or 15,249 futures and options combined, to 42,487.