POST YOUR OIL NEWS, Clips here


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Nicked from the Hawk board over on another site. Good news for many O&G Co's

USA Oil Windfall Tax Shelved

"...The switch drew applause from industry. The judgment to withdraw the concept of a windfall profits tax is an important recognition that developing America's oil and natural gas would be seriously damaged by such a tax policy," said Lee Fuller, vice president of government relations for the Independent Petroleum Association of America, which represents independent oil and gas producers..."

Full article here:

http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4B206W20081203

Oil now under $45 heading south?

Quite strange considering the markets have been quite buoyant and dollar weakening today must be close to the lower trendline now or is it a reverse blow-off!

Quite strange considering the markets have been quite buoyant and dollar weakening today must be close to the lower trendline now or is it a reverse blow-off!

Quite strange considering the markets have been quite buoyant and dollar weakening today must be close to the lower trendline now or is it a reverse blow-off!

December 4, 2008


Oman to assume $45bbl oil price in 2009 budget



Oman will amend its 2009 budget to assume an average oil price of $45 a barrel following a sharp decline of around $100 in international crude prices since July.


Omans official news agency said the Persian Gulf Arab oil producers council for financial affairs and energy resources agreed at a meeting to amend the oil price assumed in the budget.

The council agreed the amendments, the most important of which is to calculate oil revenues based on an average of $45 a barrel in line with the recent developments in the oil markets represented by a significant decline in the price of oil compared to the level reached in the first half of the year, the statement said.

It did not say what the previous oil price assumed in its 2009 budget was. Oman is a small oil producer and is not a member of OPEC.

(Source: Trade Arabia)

Just watched some presenter on the news rabitting on about how $25 oil will "help us all at the pumps"

MOTHER OF ALL LOL's

Haven't they a CLUE what damage that will do to the price of oil? With exploration, development, upkeep on ice or just plain abandoned they would soon after see $200 as a result. Oh jeez are they really that stupid!?!?

Yes!

With demand falling, there is no way oil will reach $200 in the short to medium term...



Oil to hit $25 a barrel as global recession deepens, Merrill Lynch predicts

Oil prices could tumble below $25 a barrel next year if the global recession reaches China, investment bank Merrill Lynch has predicted.

The prediction that the crude prices could revisit lows last seen in 2002 led to a plunge in energy shares on Wall Street and sent the Dow Jones index down 215 points - or 2.5pc.

"With demand vanishing across all key oil consuming regions, benchmark crude oil prices continue to plummet," Merrill said in a research note. "A temporary drop below $25 a barrel is possible if the global recession extends to China."

Oil fell below $43 barrel overnight as crude oil heads for its biggest weekly decline since March 2003. Since the US was declared to be in recession earlier this week the price has fallen 19pc.

"The connection is pretty clear - fewer people in jobs is a clear sign of a weakening economy,'' said Toby Hassall, a research analyst at Commodity Warrants Australia in Sydney.

"As unemployment rises, GDP falls and oil demand falls. It's not likely to show much hope for the economy.''

However, low prices are not expected to last.

"With demand vanishing"

WTF?!? What planet do these people live on?

Kilduff: Expect Rebound In Oil Prices Early 2009
Posted By:John Kilduff


John Kilduff
CNBC Contributor

Crude oil prices are now mired well below $50 per barrel, and they look to be heading lower still. While some of the price pressures are obvious, there is one that may be less so: hedge fund liquidations. The list of funds that have had to enact capital preservation measures is growing by the day, and the names are notable: Tudor Investments, Fortress Investments, and D.E. Shaw have all reported that several of their funds have thrown up the gates preventing further investor redemptions, due to being swamped by requests for redemptions from investors that must be met by year-end.

These are probably the most notable instances of what is happening, but they are hardly alone. I believe the liquidations underway to meet these year-end cash payouts are putting tremendous pressure on commodity prices across the board. This wave of liquidations should be expected to continue over the next several weeks, and could easily result in crude oil prices dipping down into the mid-30s. However, once this round of selling is concluded, I would expect a significant rebound in prices as we enter 2009.

I reviewed the historical price chart for crude oil, when it collapsed it 1998 to around the $10 level. History may be repeating itself. On October 1, 1998 crude oil fetched just over $16 per barrel and quickly fell to a low of $10.35 on December 21st. By May 1, 1999, prices rebounded to well over $18 per barrel. Fast forward to today, and we have crude falling from $102 from October 2nd to the mid-40s, this morning.

Obviously, the economic landscape is much more challenging today than it was in late 1999, as the economy was enthralled in early part of the dot com boom.

However, even with Chinas economy slowing and the dim economic data before us, the extent of the sell-off seems to have over shot, the same way $147 per barrel did on the upside. With more and more expansion plans being shelved by energy companies and production cutbacks from both OPEC and Non-OPEC producers looming, energy supplies will quickly tighten, as the global economy turns back up, even modestly.

Investors should also take note of the performance of the oil majors like ExxonMobil [XOM 76.60 0.33 (+0.43%) ] , Chevron [CVX 74.42 2.66 (+3.71%) ] , and BP [BP 43.52 0.19 (+0.44%) ] . Their shares prices never went hyperbolic with the price of oil, but even with the nearly $60 dollar drop from October, their share prices have been relatively stable and their recent lows probably represent long-term bottoms.

The crash in energy prices is incredibly simulative to the economy. I submit that the energy price shock of last summer had as much as anything to do with our current economic straits. Each of the last several recessions, including the relatively tame circa 2001 recession, have been preceded by a spike in energy prices.

This mornings devastating employment report, which showed a loss of 533,000 jobs, certainly represents a challenge to my thesis that prices can rebound in the first quarter of next year. However, it appears everyone from investors to hedge fund to companies are clearing the decks ahead of the New Year. With the worst of the news being put behind us, and prices declines for oil into the $30s, the case for a rebound remains

http://www.rigzone.com/news/article.asp?a_id=71745

Why We'll See $200 Oil Soon

Done marky ;) .... IMHO 2009 Will be slow things need to settle down, but oil will tic up slowly in the next 12/18 months !


The "Era of Cheap Oil Prices"
is Ending Soon ( from MoneyMorning)


When the global recession ends in 2009, all of the factors that drove oil prices to record highs last summer will again be exposed and oil prices will again hit triple digits.


Here's why oil prices will rebound and the six oil plays the best investors are making now while oil prices are at historic lows

Enjoy oil prices now while they're cheap, because a cadre of analysts is calling for oil to rise as much as 113% in 2009.

Among the many reasons oil producers, importers and exporters are bracing for a serious oil price hike !!

The "easy" oil has already been found.
The world's largest fields are declining - from the Persian Gulf, to the North Sea, to the Gulf of Mexico, to Alaska.
Two major oil exporters - Indonesia and China - have begun importing oil.
New growth in Asia is demanding nearly 10 billion barrels every year while
There's hasn't been an "elephant oil field" discovery (one that yields at least 1 billion barrels) in 40 years.
This report outlines - in plain English - when oil prices will begin climbing again and how high the top oil experts say oil prices are going to go in 2009, 2015 and 2030.

Only 113%?

'Oil storage at 25 year high'

By Upstream staff


Norway's Frontline, one of the world's biggest oil tanker owners, said today oil companies were storing "about" 80 million barrels of crude oil at sea, possibly the highest in a quarter of a century.


"We think it's about 80 million barrels...but we are not 100% certain," the acting chief executive officer Martin Jensen told Reuters.

He said some 30 to 35 very large crude carriers capable of carrying two million barrels each and 10 Suezmaxes with a capacity of a million barrels each were being used by oil companies for floating storage in the last few months.

The figures include oil tankers owned by oil companies which were being used to stockpile oil.

Jensen said most of the supertankers being used for "floating storage" were anchored in the US Gulf, with others laid up in Asia and the Middle East Gulf.

"The Iranians have some and others are around Fujairah," he said.

Oil majors and independent trading companies have booked tankers in the last three months for storage to take advantage of a steep contango in the oil market.

Major ship broking houses and industry sources contacted by Reuters since oil majors and traders began storing oil late last year give more conservative estimates for storage.

Most say oil companies are storing some 60 to 70 million barrels in total, more than 3O VLCCs worth of oil equivalent.

"The truth is no one really knows exactly how much is being stored," one said.

"We have a total of 14 VLCCs chartered in from the spot market, what the oil majors are doing with their own fleets we just don't know," he said.

Futures nudge $48 as Opec cuts bite
News wires

Oil rose towards $48 a barrel in US trade, supported partly by perceptions the supply cuts by Opec producers may have put a floor under prices.


US crude rose $1.31 to $47.78 a barrel by 1623 GMT, after earlier rising to a session high of $48.59.

London Brent was up 50 cents at $48.87 a barrel.

"Opec is cutting output, as per their December mandate, by a lot more than discounted by the market - 70% (compliance) rather than 50%," Nauman Barakat, senior vice president at Macquarie Futures USA in New York, told Reuters.

"US crude, at least technically, is showing signs of bottoming out," he said.

Gains in US equity markets also provided a more positive backdrop to the energy markets.

Key US stock market indexes advanced after a report showed the pace of sales of existing homes in the US rose 6.5% in December.

The Dow Jones industrial average, for example, was up more than 90 points.

Oil has fallen more than $100 from a record peak above $147 a barrel in July, depressed by steep falls in energy demand as the world economy slides towards recession.

The International Monetary Fund has cut its forecasts for 2009 global growth to 0.5% from 2.2% in its previous economic outlook on the world economy issued in November.

Crude had jumped more than 6% on Friday boosted by evidence that Opec was making good on most of its pledged 2.2 million barrel per day cut in production this month.

Oil rebounds on smaller stocks hope

By Upstream staff


Oil rebounded above $42 a barrel today from a 9%t fall a day ago, as worries over demand due to the faltering global economy eased.


Traders will watch for weekly US inventory data from the Energy Information Administration due later in the day, after the American Petroleum Institute reported a much smaller than expected crude stockbuild yesterday.

US crude rose 50 cents a barrel to $42.08 by 0611 GMT, and London Brent crude climbed 60 cents to $44.33.

"It's just an illiquid dead cat bounce," said Jonathan Kornafel, Asia director of US-based options house Hudson Capital Energy.

Oil prices had plunged 9% yesterday on fresh indications that the world's top energy consumer the US was still deeply mired in recession.

Consumer confidence in the world's top consumer fell to a record low in January, a survey showed, and US home prices plunged a record 18.2% in November from a year earlier, according to data from Standard & Poor's.

Governments pledged billions of dollars yesterday to rescue their battered economies, with US President Barack Obama approaching opposition lawmakers to support his $825 billion stimulus proposal.

Most Republicans in the US House of Representatives were expected to oppose the proposal, saying it needs more tax cuts and less spending, but Democrats were confident they had the votes to push it through.

Traders will also watch for the results of a key two-day Federal Reserve meeting due out later in the day, with policy makers expected to hold their target for official borrowing costs in a range of zero to 0.25%.

The global economic crisis has weakened crude demand, especially in developed economies, and knocked prices off peaks of over $147 a barrel hit in July.

US crude stocks are expected to have risen for the fifth straight week last week by 2.9 million barrels, an expanded Reuters poll showed, much higher than the 800,000-barrel build the API reported yesterday.

The API has begun releasing its weekly inventory report on Tuesday afternoons, a day ahead of the official EIA report.

Supply cuts by Opec since second-half 2008 have given oil markets some support against the gloomy demand backdrop.

Kuwait said yesterday it would support a further output cut if needed, echoing comments by some other Opec members, while smallest member Ecuador said it would comply with the production cuts agreed by the cartel.

Opec next meets on 15 March 5 to decide on output policy. Some analysts say current cuts may be insufficient to end the steep drop in prices.

"You have a tug-of-war. Opec following through hardcore (with the output cuts) has given a bit of push to the market but in the meantime it's going to be demand," Kornafel said.

http://seekingalpha.com/article/117315-using-dbo-uso-and-oil-to-play-crude-oil

wierdly wti March is down 47 and april 147 not sure why convergence like this occurs

Tue, Feb 3 2009, 17:02 GMT
http://www.afxnews.com



By John Kemp


LONDON, Feb 3 (Reuters) - Perhaps the most significant development in financial markets over the last month has been the steepening of the yield curve for U.S. Treasury debt.


Like other indicators based on market expectations, the yield curve is not an infallible guide to the future. But the shift suggests investors are beginning to brace for higher inflation rates between 2010 and 2012, with rising commodity and energy prices likely to drive the increase.


Curve steepening represents a balance between intense demand for security and liquidity in the short term, matched by longer-term concerns about the cost of bank rescues and fiscal stimulus, and possible emergence of inflation as a result of all the liquidity being pumped into the banking system .


Investors are increasingly convinced liquidity will remain too high for too long, with the Fed hesitating to end emergency programmes until there are firm signs of recovery. Whisper it quietly, but there is also widespread suspicion the Fed would welcome a modest increase in inflation as one way to ease the burden of debts which built up during the late 1990s and early 2000s.


In recent weeks, officials have considered committing the central bank to an inflation target, but seem to have rejected the idea for now. One reason is probably that it would fuel suspicions about the central bank's willingness to tolerate faster inflation, pushing bond rates up just when the Fed wants them to come down. But the other is lack of agreement on what the target itself would be.


For fifteen years, central banks have defined their loosely worded "price stability" objective as an inflation rate of about two percent. But there is nothing special about this number either in economic theory or the operating statutes.


Most economists have expressed a preference for low but positive inflation. But there is no specific reason to prefer a rate of two percent rather than three percent or four percent.


Arguably, disinflationary forces in the late 1990s caused the major central banks to set inflation targets that were artificially low and over-ambitious. Policymakers and investors became obsessed by minute changes in the measured inflation rate (down to tenths of a percentage point), blinding them to mounting signs of instability elsewhere.


So the Fed and other central banks could probably tolerate an increase in inflation to three or even four percent in the medium term, and still label it "price stability", if it would help stabilise the banking system and promote a strong and sustained recovery.




A DISTANT MIRROR


It might seem odd to be writing about inflation and rising commodity prices amid the worst slump in the global economy since the 1930s. But past experience and economic theory both point to a sharp rise in inflation and commodity prices as part of a strong cyclical recovery during the three years from 2010 to 2012.


Popular perception of the Great Depression is one long unending slump lasting a decade from the stock market crash in 1929 and ending with outbreak of the Second World War. Nothing could be further from the truth.


While the whole decade was grim, the depression was actually two separate downturns (1929-33 and 1937-39), both deep, punctuated by one of the strongest cyclical upswings on record (1934-37).


This cyclical pattern (wrenching declines in output and prices, followed by equally spectacular recoveries) was fairly typical of the economy's cyclical behaviour before the rise of post-1945 Keynesian demand management.


The chart here (https://customers.reuters.com/d/graphics/CYCLE2.pdf) illustrates the deep cyclical swings that characterised the pre-war economy, with more detail on its behaviour during the 1930s here (https://customers.reuters.com/d/graphics/CYCLE3.pdf).


Between July 1929 and July 1933, manufacturing output in the United States declined at an average rate of 7.1 percent a year. Wholesale prices fell 6 percent. What seared the "Great Contraction" of 1929-1933 into popular consciousness was not the speed of decline but the fact it went on for four long years, seemingly unendingly, and culminated in the spectacular nationwide banking failures of early 1933, in which more than 8 percent of all U.S. bank deposits became frozen in suspended banks.


But once the economy stabilised in early 1933, a powerful cyclical recovery got underway. From July 1933 to the next peak in July 1937, output surged by an average of 9 percent a year, while wholesale prices rose 6 percent.


By the July 1937, wholesale prices had reversed about three quarters of their previous decline and were fast approaching levels that had prevailed at the end of the Roaring Twenties.


Crucially, reflation was driven by raw materials. Between 1933 and 1937, steel prices rose 40 percent. By 1937 billet was more expensive than before the crash. The price of copper halved between 1928 and 1933. But by 1937 it had risen almost 90 percent, and was fast approaching the pre-slump level.


Consumer prices rose half as fast (3.4 percent per year) as producer ones (6.4 percent per year). But the surge in steel, especially in 1936 and the first half of 1937, was enough to convince Fed officials policy needed to be tightened.


Senior officials were particularly worried rising materials prices would intersect with the large amount of excess liquidity in the banking system to fuel even further price increases in future. The Fed estimated U.S. banks were holding around $3 billion of potentially inflationary "excess reserves". So the central bank set out to drain the system, hiking reserve requirements three times in the space of less than a year, from 13 percent to 26 percent.


The direct result was previously excess reserves were "absorbed" and suddenly became required ones. The indirect one was a massive crippling contraction in credit. Subsequent observers have accused the Fed of killing the recovery, tipping the economy into a renewed and vicious recession from which it did not fully recover until the onset of war.


For a full discussion of the cyclical credit and commodity dynamics of the 1930s see the chartbook here (https://customers.reuters.com/d/graphics/DSTMIRROR.pdf).


Bernanke is unlikely to want to repeat the error. If commodity and energy prices begin a strong recovery in 2010-12, the Fed will almost certainly deflect calls to raise interest rates and withdraw excess liquidity, claiming it is a one-off realignment rather than ongoing inflation.


Experience in the 1930s as well as more recently, suggests the Fed will accommodate raw materials prices rather than risk ending the expansion prematurely. Liquidity conditions will remain highly favourable to commodity-driven reflation.


The full-impact of second round effects of the recession (as job losses and fear dampen consumer spending, and investment falls) have yet to be felt. But downturns do not last forever. The average business cycle contraction in the United States has lasted 17 months. Only one contraction in the modern era (1929-1933) lasted more than two years, and that was compounded by policy errors that led to the almost total evisceration of the banking system, which have not been repeated.


With the banking apparently stabilising, albeit on central bank life-support, and the current downturn starting in December 2007, it is reasonable to assume the cyclical trough will occur sometime in H2 2009.


Once activity has hit the trough, past experience suggests a powerful rebound, driven by the need to rebuild depleted inventory along the supply chain, and accompanied by a resurgence of raw materials prices.


While commodities are unlikely to regain frothy peaks recorded in the first half of this year, the normal recovery pattern makes it quite conceivable they will regain the relatively high levels reported in 2006 and 2007 (ie crude oil prices of $60-100 per barrel) by 2012-2013.


In a policy environment that will prioritise growth and jobs, the Fed could easily re-label an inflation rate of 3 or even 4 percent as consistent with stable prices, noting it is a recovery from a low base, and tighten only slowly, even as raw materials prices climb.